The Metropolitan Government of Nashville and Davidson County … · 2015. 7. 28. · the...

NEW ISSUE - Book-Entry-Only Ratings: Moody’s: “Aa2” S&P: “AA” (See “Ratings” herein)

In the opinion of Bass, Berry & Sims PLC, Bond Counsel, based on existing law and assuming compliance with certain tax covenants of the Metropolitan Government, interest on the Bonds (as defined below) will be excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining the adjusted current earnings of certain corporations for purposes of the alternative minimum tax on corporations. For a more detailed explanation of certain tax consequences under federal law which may result from the ownership of the Bonds, see the discussion under the heading “TAX MATTERS” herein. Under existing law, the Bonds and the income therefrom will be exempt from all state, county and municipal taxation in the State of Tennessee, except inheritance, transfer and estate taxes, and Tennessee franchise and excise taxes. (See “TAX MATTERS” herein).

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY (TENNESSEE)

$347,235,000GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2015C

Date of Delivery: July 30, 2015 Due: July 1, as shown on inside cover

The Metropolitan Government of Nashville and Davidson County (Tennessee) (the “Metropolitan Government”) is issuing its $347,235,000 General Obligation Improvement Bonds, Series 2015C (the “Bonds”). The Bonds are being issued pursuant to the provisions of Tennessee law described herein and pursuant to resolution of the Metropolitan County Council of the Metropolitan Government as further described herein.

The proceeds of the Bonds will be used to (i) provide long-term financing for public works projects through the retirement of outstanding commercial paper bond anticipation notes and (ii) pay certain costs of issuance of the Bonds.

The Bonds will be direct obligations of the Metropolitan Government for which its full faith and credit are pledged and shall be payable from ad valorem taxes to be levied on all taxable property within the Metropolitan Government without limitation as to rate or amount. See “SECURITY AND SOURCE OF PAYMENT” herein. The Metropolitan Government has never defaulted on its bonds or notes.

The Bonds shall be fully registered bonds without coupons in denominations of $5,000 as described herein and integral multiples thereof, and when issued will be registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York, (“DTC”) to which principal and interest will be paid. Beneficial owners of the Bonds will not receive physical delivery of Bond certificates except as described herein. U.S. Bank National Association, Nashville, Tennessee, will serve as Registrar and Paying Agent (the “Registration Agent”) for the Bonds.

The Bonds will be dated their date of delivery, will mature on July 1 in each of the years and in the principal amounts as specified on the inside cover and will bear interest from their date payable on January 1 and July 1 in each year beginning January 1, 2016, at the rates per annum specified on the inside cover. The Bonds are subject to optional redemption as described herein.

The Bonds are offered for delivery when, as, and if issued, subject to the legal opinion of Bass, Berry & Sims PLC, Nashville, Tennessee, Bond Counsel to the Metropolitan Government. Certain legal matters will be passed on for the Metropolitan Government by the Metropolitan Director of Law. First Southwest Company, LLC, Dallas, Texas, is serving as Financial Advisor to the Metropolitan Government. The Bonds will be available for delivery through DTC on or about July 30, 2015.

This Official Statement is dated July 21, 2015

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND

DAVIDSON COUNTY (TENNESSEE)

$347,235,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2015C

Maturity (July 1) Amount Rate Yield CUSIP No.(1)

2017 $12,310,000 5.000% 0.700% 592112 PV2

2018 12,945,000 5.000 1.000 592112 PW0

2019 13,640,000 5.500 1.220 592112 PX8

2020 14,375,000 5.000 1.460 592112 PY6

2021 15,115,000 5.000 1.750 592112 PZ3

2022 15,890,000 5.000 2.050 592112 QA7

2023 16,705,000 5.000 2.210 592112 QB5

2024 17,470,000 4.000 2.350 592112 QC3

2025 18,185,000 4.000 2.500 592112 QD1

2026 19,025,000 5.000 2.650 (2) 592112 QE9

2027 20,000,000 5.000 2.720 (2) 592112 QF6

2028 21,025,000 5.000 2.810 (2) 592112 QG4

2029 22,105,000 5.000 2.890 (2) 592112 QH2

2030 23,235,000 5.000 2.960 (2) 592112 QJ8

2031 24,430,000 5.000 3.020 (2) 592112 QK5

2032 25,680,000 5.000 3.070 (2) 592112 QL3

2033 26,930,000 4.500 3.390 (2) 592112 QM1

2034 28,170,000 4.500 3.430 (2) 592112 QN9

(1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein are provided by Standard and Poor's CUSIP Service

Bureau, a Division of the McGraw-Hill Companies, Inc. These data are not intended to create a database and do not serve in any way as a substitute for the CUSIP Services. The Metropolitan Government is not responsible for the use of CUSIP numbers, nor is any representation made as to their correctness. They are included solely for the convenience of the readers of this Official Statement.

(2) Yield to call date of 7/1/2025.

No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other than those contained in this Official Statement, in connection with the offering of the Bonds, and, if given or made, such information or representation must not be relied upon as having been authorized by the Metropolitan Government or First Southwest Company, LLC (the “Financial Advisor”). This Official Statement does not constitute an offer or solicitation in any jurisdiction which such offer or solicitation is not authorized, or in which any person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. The information set forth herein has been obtained from the Metropolitan Government and other sources which are believed to be reliable, but is it not guaranteed as to accuracy or completeness by, and it not to be construed as a representation by, the underwriters of the Bonds.

This Official Statement is not to be construed as a contract with the purchaser of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts, or matters of opinion, whether or not expressly so described herein, are intended solely as such, and are not to be construed as a representation of fact. This Official Statement contains "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance and achievements to be different from future results, performance and achievements expressed or implied by such forward-looking statements. Investors are cautioned that the actual results could differ materially from those set forth in the forward-looking statements.

The information and expressions of opinions contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the Metropolitan Government since the date hereof.

All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Bonds are qualified in their entirety by reference to the form thereof included in the Resolution (as defined herein), and the provisions with respect thereto included in the aforementioned documents and agreements.

THIS OFFICIAL STATEMENT IS INTENDED TO REFLECT MATERIAL FACTS AND CIRCUMSTANCES AS THEY EXIST ON THE DATE OF THIS OFFICIAL STATEMENT OR ON SUCH OTHER DATE OR AT SUCH OTHER TIME AS INDENTIFIED HEREIN. NO ASSURANCE CAN BE GIVEN THAT SUCH INFORMATION WILL NOT BE MISLEADING AT A LATER DATE. CONSEQUENTLY, RELIANCE ON THIS OFFICIAL STATEMENT AT TIMES SUBSEQUENT TO THE ISSUANCE OF THE BONDS SHOULD NOT BE MADE ON THE ASSUMPTION THAT ANY SUCH FACTS OR CIRCUMSTANCES ARE UNCHANGED.

THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) BY REASON OF CERTAIN EXEMPTIONS CONTAINED IN THE SECURITIES ACT OF 1933, AS AMENDED. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT REGARDING THE METROPOLITAN GOVERNMENT, THE BONDS AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY, NOR HAVE SUCH AUTHORITIES CONFIRMED THE ACCURACY OR DETERMINED THE ACCURACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE FINANCIAL ADVISOR HAS BEEN EMPLOYED BY THE METROPOLITAN GOVERNMENT TO ADVISE IT WITH RESPECT TO CERTAIN MATTERS RELATING TO THE PROPOSED STRUCTURE OF THE BONDS. THE FINANCIAL ADVISOR HAS NOT BEEN EMPLOYED AND ASSUMES NO DUTY OR OBLIGATION TO ADVISE ANY OTHER PARTY AS TO ANY ASPECT OF THE TRANSACTION, INCLUDING THE HOLDERS OF THE BONDS.

For additional information regarding the following, please contact:

Metropolitan Government Official Statement

Mr. Richard M. Riebeling Director of Finance for the Metropolitan Government PO Box 196300 Nashville, TN 37219 Metropolitan Courthouse 1 Public Square Suite 106 Nashville, TN 37201 (615) 862-6151

Mr. Tom Eddlemon Treasurer for the Metropolitan Government PO Box 196300 Nashville, TN 37219 700 2nd Avenue South Suite 205 Nashville, TN 37210 (615) 880-2818

TABLE OF CONTENTS

INTRODUCTION ........................................................................................................................................................................................................... 1

THE BONDS ................................................................................................................................................................................................................... 2

REDEMPTION PROVISIONS ...................................................................................................................................................................................... 4

SECURITY AND SOURCE OF PAYMENT ................................................................................................................................................................ 4

REMEDIES ..................................................................................................................................................................................................................... 5

PLAN OF FINANCE ...................................................................................................................................................................................................... 5

SOURCES AND USES OF FUNDS .............................................................................................................................................................................. 6

CURRENT FINANCIAL CONSIDERATIONS ........................................................................................................................................................... 6

SUMMARY OF GENERAL FUND, FISCAL YEARS 2010-2014.............................................................................................................................. 6

ANTICIPATED FUTURE BORROWING PLANS ...................................................................................................................................................... 6

INVESTMENT CONSIDERATIONS ........................................................................................................................................................................... 7

LITIGATION .................................................................................................................................................................................................................. 9

CERTAIN LEGAL MATTERS ...................................................................................................................................................................................... 9

CONTINUING DISCLOSURE ...................................................................................................................................................................................... 9

TAX MATTERS ............................................................................................................................................................................................................. 9

RATINGS ...................................................................................................................................................................................................................... 12

UNDERWRITING ........................................................................................................................................................................................................ 13

FINANCIAL ADVISOR .............................................................................................................................................................................................. 13

INDEPENDENT AUDITORS ...................................................................................................................................................................................... 13

FORWARD-LOOKING STATEMENTS .................................................................................................................................................................... 13

MISCELLANEOUS INFORMATION ........................................................................................................................................................................ 14 APPENDIX A: Electronic Link to Comprehensive Annual Financial Report for the Metropolitan Government for the Fiscal Year Ended June 30, 2014 ................................................................... A-1 APPENDIX B: Financial and Demographic Information Related to the Metropolitan Government ........................ B-1 APPENDIX C: Form of Opinion of Bond Counsel .................................................................................................. C-1 APPENDIX D: Form of Continuing Disclosure Certificate ..................................................................................... D-1

METROPOLITAN GOVERNMENT OFFICIALS, STAFF AND CONSULTANTS

Mayor and Metropolitan County Council

Karl F. Dean – Mayor Diane Neighbors – Vice Mayor and Council President

Megan Barry – Council Member At Large Tony Tenpenny – District Council Member Ronnie Steine – Council Member At Large Sandra Moore – District Council Member Tim Garrett – Council Member At Large Burkley Allen – District Council Member Charlie Tygard – Council Member At Large Erica Gilmore – District Council Member Jerry Maynard – Council Member At Large Buddy Baker – District Council Member Lonnell Matthews Jr. – District Council Member Edith Langster – District Council Member Frank Harrison – District Council Member Sheri Weiner – District Council Member Walter Hunt – District Council Member Emily Evans – District Council Member Brady Banks – District Council Member Jason Holleman – District Council Member Scott Davis – District Council Member Sean McGuire – District Council Member Peter Westerholm – District Council Member Chris Harmon – District Council Member Anthony Davis – District Council Member Davette Blalock – District Council Member Karen Bennett – District Council Member Duane A. Dominy – District Council Member Bill Pridemore – District Council Member Karen Y. Johnson – District Council Member Doug Pardue – District Council Member Jason Potts – District Council Member Larry Hagar – District Council Member Fabian Bedne – District Council Member Steve Glover – District Council Member Jacobia Dowell – District Council Member Josh Stites – District Council Member Robert Duvall – District Council Member Bruce Stanley – District Council Member Carter Todd – District Council Member Phil Claiborne – District Council Member Bo Mitchell – District Council Member

Select Administrative Staff

Richard M. Riebeling – Director of Finance Saul Solomon – Director of Law Kim McDoniel – Assistant Director of Finance Tom Eddlemon – Treasurer

Shannon B. Hall – Metropolitan Clerk

Consultants and Advisors

Metropolitan Government Counsel ........................................................................... Metropolitan Department of Law Nashville, Tennessee

Bond Counsel ......................................................................................................................... Bass, Berry & Sims PLC

Nashville, Tennessee

Financial Advisor ........................................................................................................ First Southwest Company, LLC Dallas, Texas

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OFFICIAL STATEMENT RELATING TO

THE METROPOLITAN GOVERNMENT OF

NASHVILLE AND DAVIDSON COUNTY (TENNESSEE)


INTRODUCTION

The Metropolitan Government of Nashville and Davidson County (Tennessee) (the "Metropolitan

Government") is issuing its $347,235,000 General Obligation Improvement Bonds, Series 2015C (the “Bonds”). The Bonds are issued pursuant to Chapter 21 of Title 9 of the Tennessee Code Annotated, as amended, the Charter of the Metropolitan Government (the "Charter"), and subject to the terms and conditions contained in the resolution authorizing the Bonds adopted by the Metropolitan County Council on June 9, 2015 (the "Bond Resolution").

The proceeds of the Bonds will be used to (i) provide long-term financing for public works projects through the retirement of outstanding commercial paper bond anticipation notes and (ii) pay certain costs of issuance of the Bonds.

The Bonds shall be issued as fully registered bonds without coupons and shall be dated as of their date of

delivery. The principal of and interest and premium, if any, on the Bonds shall be payable at the office of U.S. Bank National Association, Nashville, Tennessee, as Registrar and Paying Agent (the “Registration Agent”), as the same shall become due and payable.

The Bonds will bear interest at the rates specified on the inside cover page, payable semiannually on January 1 and July 1 in each year beginning January 1, 2016, and will be in denominations of $5,000 or any integral multiple thereof and will mature on July 1 in each of the years and in the amounts as specified on the inside cover page. Interest on the Bonds will be paid by draft or check mailed to the person in whose name the Bond is registered in the bond registration books kept by the Registration Agent as Bond Registrar as of the close of business on the fifteenth day of the calendar month next preceding any interest payment date. As long as the Bonds are held by The Depository Trust Company, New York, New York, (“DTC”) or its nominee, interest will be paid to Cede & Co., as nominee of DTC, in next day funds on each interest payment date.

The Bonds will initially be issued in book-entry-only form and will be registered in the name of Cede & Co., as nominee of DTC. Purchases of the Bonds will be made in book-entry form through DTC Participants. No physical delivery of Bonds will be made to purchasers of the Bonds unless the book-entry-only system of registration is discontinued, or as may otherwise be provided herein. Payments on the Bonds will be made to bondholders by DTC through DTC Participants. See "THE BONDS – BOOK-ENTRY-ONLY SYSTEM" herein.

All financial and other information presented in this Official Statement has been compiled from records of the Metropolitan Government, except for information expressly attributed to other sources. All quotations from, and summaries and explanations of, provisions of statutes contained herein do not purport to be complete and are qualified in their entirety by reference to the official compilations thereof, and all references to the Bonds and proceedings of the Metropolitan Government relating thereto are qualified in their entirety by reference to the form of the Bonds and such proceedings. Recent historical information does not indicate future or continuing trends in the Metropolitan Government's financial position or other affairs, unless specifically stated.

An electronic link to the Metropolitan Government's comprehensive annual financial report for the fiscal

year ended June 30, 2014 is incorporated herein in Appendix A.

Certain financial and demographic information of the Metropolitan Government is set forth in Appendix B. The form of opinion of Bond Counsel is attached hereto as Appendix C, and the form of Continuing Disclosure Certificate is attached as Appendix D.

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Investors should consider the entire Official Statement in making an investment decision, and should not consider information more or less important because of its location. Investors should refer to laws, reports or other documents described in this Official Statement for more complete information.

THE BONDS

Description of the Bonds

The Bonds will be issued by the Metropolitan Government pursuant to its Charter, the laws of the State of Tennessee (the “State”), particularly Tennessee Code Annotated Sections 9-21-101 et. seq. (the "Local Government Public Obligations Law" or "LGPOL") and the Bond Resolution. Proceeds of the Bonds will be used as set forth hereinafter under “Purpose” and in "PLAN OF FINANCE".

Book-Entry-Only System

This section describes how ownership of the Bonds is to be transferred and how the principal and interest on the Bonds are to be paid to and credited by DTC while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The Metropolitan Government believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof.

The Metropolitan Government cannot and does not give any assurance that (1) DTC will distribute payments of debt service on the Bonds, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the SEC, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC.

DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Series 2015 Bond will be issued for each maturity of the Bonds in the aggregate principal amount of each such maturity and will be deposited with DTC.

DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's ratings of: AA+. The DTC Rules applicable to its Participants are on file with the SEC. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2015 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owners entered into the transaction.

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Transfers of ownership interest in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Series 2015 Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registration Agent and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Metropolitan Government as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds and principal of or interest on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the Metropolitan Government or the Registration Agent, on payable dates in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Registration Agent or the Metropolitan Government, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and principal or interest to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC is the responsibility of the Metropolitan Government, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Metropolitan Government and the Registration Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered.

The Metropolitan Government may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the Bonds will be printed and delivered.

Use of Certain Terms in Other Sections of This Official Statement

In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised

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through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners pursuant to the Resolution will be given only to DTC.

Information concerning DTC and the Book-Entry-Only System has been obtained from DTC and is not

guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the Metropolitan Government, the Financial Advisor or the Underwriter.

Effect of Discontinuance of Book-Entry-Only System

In the event that the Book-Entry-Only System is discontinued by DTC or the use of the Book-Entry-Only System is discontinued by the Metropolitan Government, printed Bonds will be issued to the holders and the Bonds will be subject to transfer, exchange and registration provisions as set forth in the Resolution.

REDEMPTION PROVISIONS

Optional Redemption

The Bonds maturing July 1, 2026 and thereafter shall be subject to redemption prior to maturity at the option of the Metropolitan Government on July 1, 2025 and thereafter, as a whole or in part at any time, at a redemption price of par plus interest accrued to the redemption date.

If less than all of the Bonds are to be redeemed, the Registration Agent, upon written instruction from the Metropolitan Government, shall select the Bonds for redemption from such maturity dates and in such amounts as are selected by the Metropolitan Government, and if less than all the Bonds within a single maturity are to be redeemed, DTC or a successor depository shall select the Bonds from within such selected maturities by lot or such other manner as DTC or the successor depository shall determine. If less than all the Bonds within a single maturity are to be redeemed and the Bonds are no longer held under a book-entry system by DTC or a successor depository, the Registration Agent shall select the Bonds from within such selected maturities by lot or such other manner as the Registration Agent shall determine. In any event, the portion of any Series 2015 Bond to be redeemed in part shall be in the principal amount of $5,000 or any integral multiple thereof.

Notice of Redemption

Notice of call for redemption shall be given by the Registration Agent on behalf of the Metropolitan Government not less than twenty (20) nor more than sixty (60) days prior to the date fixed for redemption by sending an appropriate notice to the registered owners of the Bonds to be redeemed by first-class mail, postage prepaid, at the addresses shown on the Series 2015 Bond registration records of the Registration Agent as of the date of the notice; but neither failure to mail such notice nor any defect in any such notice so mailed shall affect the sufficiency of the proceedings for redemption of any of the Bonds for which proper notice was given. If at the time of the giving of the notice of redemption there shall not be on deposit with the Registration Agent moneys sufficient to redeem all the Bonds of a series called for redemption, the notice of redemption shall state that the redemption of such Bonds of such series is conditional upon and subject to deposit of moneys with the Registration Agent sufficient to redeem all such Bonds not later than the opening of business on the redemption date and that such notice shall be of no effect if such moneys are not on deposit. The Registration Agent shall mail said notices as and when directed by the Metropolitan Government pursuant to written instructions from an authorized officer of the Metropolitan Government given at least forty-five (45) days prior to the redemption date (unless a shorter notice period shall be satisfactory to the Registration Agent).

SECURITY AND SOURCE OF PAYMENT

The Bonds shall be payable from unlimited ad valorem taxes to be levied on all taxable property within the Metropolitan Government. For the prompt payment of principal of and interest on the Bonds, the full faith and credit of the Metropolitan Government are irrevocably pledged.

Under State law, the Metropolitan Government's legislative body is authorized to levy a tax on all taxable

property within the Metropolitan Government, or a portion thereof, without limitation as to rate or amount, and a

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referendum is neither required nor permitted to set the rate or amount. For a more complete statement of the general covenants and provisions pursuant to which the Bonds are issued, reference is hereby made to the Bond Resolution.

By referendum passed on November 7, 2006, voters in the Metropolitan Government amended the Charter

to require that all future increases of the maximum ad valorem (real property) tax rate of $4.04 per one hundred dollars of assessed property value in the General Service District and $0.65 per one hundred dollars of assessed property value in the Urban Service District be first approved by voter referendum prior to implementation by the Metropolitan Government. The current tax rates are $3.924 for the GSD and $0.592 for the USD. The Charter amendment does not purport to specifically limit that portion of the tax rate allocable to the payment of debt service.

The LGPOL (pursuant to which the Bonds are issued) dictates the levy of a tax sufficient to pay debt service of any general obligation bonds issued thereunder, without regard to any other State or local laws to the contrary. Bond Counsel will opine that the pledge of the Metropolitan Government's unlimited taxing power is valid, binding and enforceable against it, and that there is no limitation on the Metropolitan Government's ability to impose sufficient taxes to fund debt service on the Bonds. (See Appendix C – Form of Opinion of Bond Counsel.)

If valid, the Charter amendment may limit the Metropolitan Government's ability to raise additional

revenues for governmental requirements – other than the payment of general obligation debt service – by increasing property tax rates. The information set forth in Appendices A and B to this Official Statement details the percentage of the Metropolitan Government's budget funded with ad valorem property tax revenues, and provides other pertinent information regarding the Metropolitan Government's collection and expenditure of ad valorem property tax revenues.

The Metropolitan Government's Department of Law and Bond Counsel have each opined that a court

would likely find the Charter amendment to be invalid as an unconstitutional limitation on the exercise of the Metropolitan County Council's taxing authority. Neither the legal effect nor the constitutionality of the Charter amendment has been challenged, and the timing and outcome of any such challenge cannot be predicted.

REMEDIES

Pursuant to State law, any holder of the Bonds may by mandamus or other suit, action or proceeding,

enforce such holder’s rights against the Metropolitan Government, the Metropolitan County Council or any officer, agent or employee of the Metropolitan Government, including but not limited to, the right to require the Metropolitan Government, the Metropolitan County Council and any proper officer, agent or employee of the Metropolitan Government to assess, levy and collect taxes to pay when due principal and premium, if any, of and interest on the Bonds.

PLAN OF FINANCE

The proceeds of the Bonds will be used to (i) provide long-term financing for public works projects through

the retirement of outstanding commercial paper bond anticipation notes and (ii) pay certain costs of issuance of the Bonds.

[Remainder of Page Intentionally Left Blank]

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SOURCES AND USES OF FUNDS

The table below sets forth the sources and uses of funds in connection with the issuance of the Bonds.

SOURCES Par Amount $ 347,235,000.00 Original Issue Premium 54,113,540.30 Total Sources $ 401,348,540.30 USES Retirement of Commercial Paper $ 400,000,000.00 Costs of Issuance(1) 1,348,540.30 Total Uses $ 401,348,540.30

__________________ (1) Includes underwriters' discount, legal counsel fees, financial advisor fees, rating agencies fees, printing and mailing expenses and other costs of issuance of the Bonds.

CURRENT FINANCIAL CONSIDERATIONS

Current expectations for Fiscal Year 2015 are an increase in revenue as compared to budget, and expenses to be under budgeted numbers. The result is expected to show a use of fund balance below budgeted amounts for the Fiscal Year.

The Fiscal Year 2016 budget of $1,968,285,900 has been adopted and represents a $76,638,900 increase over Fiscal Year 2015, or 4.05%. The budget included no increase in property tax rates. Increases in the budgeted expenditures were primarily in these categories: (1) public education ($36.1 million); (2) debt service ($4.1 million), and (3) benefits and pay increase ($23.6 million). The approved budget included appropriations of fund balance of $73.9 million.

SUMMARY OF GENERAL FUND, FISCAL YEARS 2010-2014 (in thousands of dollars)

2014 2013 2012 2011 2010

Beginning Fund Balance $ 100,538 $ 70,744 $ 67,486 $ 60,900 $ 79,727

Revenues 863,970 838,922 778,024 760,397 751,517

Expenditures -787,236 -769,234 -736,999 -728,068 -720,494

Other Financing Sources (Uses)

-60,255 -39,894 - 37,767 -25,743 -49,850

Ending Fund Balance $117,017 $100,538 $70,744 $67,486 $60,900

Unreserved Fund Balance $81,650 $84,054 $69,837 $53,134 $59,061

Source: Metropolitan Government Department of Finance

ANTICIPATED FUTURE BORROWING PLANS

The Metropolitan Government maintains and routinely draws on a general obligation commercial paper

program with up to $700 million of funding capacity of which approximately $125 million will be outstanding following the issuance of the Bonds. The general obligation commercial paper program will continue to provide initial funding for capital expenditures with no planned bond issue within the next 12 to 24 months.

7

INVESTMENT CONSIDERATIONS

General

Attention should be given to the investment considerations described below, which, among others, could affect the ability of the Metropolitan Government to pay principal of and interest on the Bonds, and which could also affect the marketability of or the market price for the Bonds.

The purchase of the Bonds involves certain investment considerations that are discussed throughout this Official Statement. Certain of these investment considerations are set forth in this section for convenience and are not intended to be a comprehensive compilation of all possible investment considerations nor a substitute for an independent evaluation of the information presented in this Official Statement. Each prospective purchaser of any Bonds should read this Official Statement in its entirety and consult such prospective purchaser's own investment and/or legal advisor for a more complete explanation of the matters that should be considered when purchasing an investment such as the Bonds.

Ratings

There is no assurance that the ratings assigned to the Bonds at the time of issuance (see "RATINGS") will not be lowered or withdrawn at any time, the effect of which could adversely affect the market price for and marketability of the Bonds.

Secondary Market Prices

No assurance can be given that a secondary market for any of the Bonds will be available, and no assurance can be given that the initial offering prices for the Bonds will continue for any period of time.

The Bonds may not constitute a liquid investment, and there is no assurance that a liquid secondary market will exist for the Bonds in the event an owner thereof determines to solicit purchasers of the Bonds. Even if a liquid secondary market exists, there can be no assurance as to the price for which the Bonds may be sold. Such price may be lower than that paid by the current owner of the Bonds, depending on existing market conditions and other factors.


8

Period Outstanding General Obligation Debt Service (1) Series 2015 Debt Service Total General Obligation Debt Service (1)

Ending Principal Interest (2) Total Principal Interest Total Principal Interest (2) Total

6/30/16 114,170,000$ 95,308,006$ 209,478,006$ -$ 7,045,786$ 7,045,786$ 114,170,000$ 102,353,792$ 216,523,792$ 6/30/17 124,715,000 90,117,057 214,832,057 - 16,797,900 16,797,900 124,715,000 106,914,957 231,629,957 6/30/18 126,535,000 85,468,776 212,003,776 12,310,000 16,490,150 28,800,150 138,845,000 101,958,926 240,803,926 6/30/19 132,250,000 79,632,375 211,882,375 12,945,000 15,858,775 28,803,775 145,195,000 95,491,150 240,686,150 6/30/20 129,880,000 74,618,957 204,498,957 13,640,000 15,160,050 28,800,050 143,520,000 89,779,007 233,299,007 6/30/21 135,310,000 69,187,507 204,497,507 14,375,000 14,425,575 28,800,575 149,685,000 83,613,082 233,298,082 6/30/22 137,130,000 62,944,993 200,074,993 15,115,000 13,688,325 28,803,325 152,245,000 76,633,318 228,878,318 6/30/23 144,555,000 56,522,956 201,077,956 15,890,000 12,913,200 28,803,200 160,445,000 69,436,156 229,881,156 6/30/24 154,020,000 50,036,841 204,056,841 16,705,000 12,098,325 28,803,325 170,725,000 62,135,166 232,860,166 6/30/25 151,980,000 43,472,050 195,452,050 17,470,000 11,331,300 28,801,300 169,450,000 54,803,350 224,253,350 6/30/26 131,080,000 37,013,419 168,093,419 18,185,000 10,618,200 28,803,200 149,265,000 47,631,619 196,896,619 6/30/27 114,425,000 31,141,179 145,566,179 19,025,000 9,778,875 28,803,875 133,450,000 40,920,054 174,370,054 6/30/28 109,605,000 25,663,547 135,268,547 20,000,000 8,803,250 28,803,250 129,605,000 34,466,797 164,071,797 6/30/29 66,315,000 21,289,796 87,604,796 21,025,000 7,777,625 28,802,625 87,340,000 29,067,421 116,407,421 6/30/30 69,215,000 17,837,859 87,052,859 22,105,000 6,699,375 28,804,375 91,320,000 24,537,234 115,857,234 6/30/31 68,040,000 14,306,977 82,346,977 23,235,000 5,565,875 28,800,875 91,275,000 19,872,852 111,147,852 6/30/32 71,060,000 10,694,756 81,754,756 24,430,000 4,374,250 28,804,250 95,490,000 15,069,006 110,559,006 6/30/33 74,235,000 6,907,514 81,142,514 25,680,000 3,121,500 28,801,500 99,915,000 10,029,014 109,944,014 6/30/34 35,825,000 2,936,375 38,761,375 26,930,000 1,873,575 28,803,575 62,755,000 4,809,950 67,564,950

6/30/35 33,745,000 962,914 34,707,914 28,170,000 633,825 28,803,825 61,915,000 1,596,739 63,511,739

2,124,090,000$ 876,063,854$ 3,000,153,854$ 347,235,000$ 195,055,736$ 542,290,736$ 2,471,325,000$ 1,071,119,590$ 3,542,444,590$

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY LONG-TERM GENERAL OBLIGATION DEBT SERVICE SCHEDULE (As of June 30, 2015)

(1) Includes Debt Service on District Energy Revenue and Refunding Bonds, Series 2012 secured by Net Revenues from the District Energy System and additionally secured by ad valorem taxes levied on all taxable property in the Metropolitan Government.

(2) Does not include any direct pay subsidy or tax credit subsidy on outstanding bonds

9

LITIGATION

At the time of original delivery of the Bonds, there will also be furnished to the Underwriter a certificate of certain officers of the Metropolitan Government stating that except as disclosed in the Official Statement there is no litigation then pending, or to their knowledge threatened, affecting the validity of the Bonds or the power of the Metropolitan Government to levy and collect ad valorem taxes to pay them.

The Metropolitan Government is a party to various lawsuits in the normal course of business. It is the opinion of the Director of Law of the Metropolitan Government that there is no pending litigation against the Metropolitan Government that, if decided adversely to the Metropolitan Government, would have a material adverse financial impact upon the Metropolitan Government or its operations.

CERTAIN LEGAL MATTERS

All legal matters incident to the authorization and issuance of the Bonds are subject to the approval of

Bass, Berry & Sims PLC, Nashville, Tennessee, Bond Counsel, whose approving opinion in substantially the form attached hereto as Appendix C will be delivered with the Bonds. Other than the descriptions of legal documents and Bond Counsel’s legal opinion set forth herein under the captions “THE BONDS” (other than the information relating to DTC and its book-entry system), “SECURITY AND SOURCE OF PAYMENT” (excluding financial and statistical data as to which no opinion is expressed), “TAX MATTERS,” and APPENDIX C – FORM OF OPINION OF BOND COUNSEL, which have been reviewed by Bond Counsel, Bond Counsel has not undertaken any responsibility for any of the information contained in this Official Statement. Certain legal matters with respect to the Metropolitan Government will be passed upon by its Director of Law.

The various legal opinions to be delivered concurrently with the delivery of the Bonds express the

professional judgment of the attorneys rendering the opinion as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise from the transaction.

CONTINUING DISCLOSURE

In connection with the issuance of the Bonds and to assist the Underwriter in complying with Rule 15c2-12 (the "Rule") promulgated by the SEC under the Securities Exchange Act of 1934, as amended, the Metropolitan Government has executed the Continuing Disclosure Certificate. The Metropolitan Government has covenanted for the benefit of the holders of the Bonds that, consistent with the Rule, it will provide: annual financial information for the Metropolitan Government, including audited financial statements of the Metropolitan Government for each fiscal year ending on and after June 30, 2014, in a timely manner, and notices of certain events with respect to the Bonds. The proposed form of the Continuing Disclosure Certificate is in Appendix D hereto.

The Metropolitan Government has agreed to provide the foregoing information only as described in the Continuing Disclosure Certificate. Investors will be able to access continuing disclosure information filed with the MSRB free of charge at emma.msrb.org.

The Metropolitan Government has been in compliance with its undertakings under the Rule.

TAX MATTERS Tennessee State Tax Exemption

Under existing law, the Bonds and the income therefrom are exempt from all present state, county and municipal taxes in Tennessee except (a) inheritance, transfer and estate taxes, (b) Tennessee excise taxes on interest on the Bonds during the period the Bonds are held or beneficially owned by any organization or entity, other than a sole proprietorship or general partnership doing business in the State, and (c) Tennessee franchise taxes by reason of the inclusion of the book value of the Bonds in the Tennessee franchise tax base of any organization or entity, other than a sole proprietorship or general partnership, doing business in the State.

10

Federal Tax Exemption

General. Bass, Berry & Sims PLC, Nashville, Tennessee, is Bond Counsel for the Bonds. Bond

Counsel is of the opinion that, under existing law, relying on certain statements by the Metropolitan Government and assuming compliance by the Metropolitan Government with certain covenants, interest on the Bonds is:

• excluded from a bondholder's federal gross income under the Internal Revenue Code of

1986, as amended (the “Code”); and • not a preference item for a bondholder under the federal alternative minimum tax; but • taken into account in determining the adjusted current earnings of certain corporations for

purposes of the federal corporate alternative minimum tax. The Code imposes requirements on the Bonds that the Metropolitan Government must continue to meet

after the Bonds are issued. These requirements generally involve the way that Bond proceeds must be invested and ultimately used. If the Metropolitan Government does not meet these requirements, it is possible that a bondholder may have to include interest on the Bonds in its federal gross income on a retroactive basis to the date of issue. The Metropolitan Government has covenanted to do everything necessary to meet these requirements of the Code.

A bondholder who is a particular kind of taxpayer may also have additional tax consequences from

owning the Bonds. This is possible if a bondholder is: • an S corporation, • a United States branch of a foreign corporation, • a financial institution, • a property and casualty or a life insurance company, • an individual receiving Social Security or railroad retirement benefits, • an individual claiming the earned income credit, or • a borrower of money to purchase or carry the Bonds. If a bondholder is in any of these categories, it should consult its tax advisor. Bond Counsel is not responsible for updating its opinion in the future. It is possible that future events or

changes in applicable law could change the tax treatment of the interest on the Bonds or affect the market price of the Bonds.

Bond Counsel expresses no opinion on the effect of any action taken or not taken in reliance upon an

opinion of other counsel on the federal income tax treatment of interest on the Bonds, or under state, local or foreign tax law.

Market Discount. Any owner who purchases a Bond at a price which includes market discount in excess

of a prescribed de minimis amount (i.e., at a purchase price that is less than its adjusted issue price in the hands of an original owner) will be required to recharacterize all or a portion of the gain as ordinary income upon receipt of each scheduled or unscheduled principal payment or upon other disposition. In particular, such owner will generally be required either (a) to allocate each such principal payment to accrued market discount not previously included in income and to recognize ordinary income to that extent and to treat any gain upon sale or other disposition of such a Bond as ordinary income to the extent of any remaining accrued market discount (under this caption) or (b) to elect to include such market discount in income currently as it accrues on all market discount instruments acquired by such owner on or after the first day of the taxable year to which such election applies.

The Code authorizes the Treasury Department to issue regulations providing for the method for accruing market discount on debt instruments the principal of which is payable in more than one installment. Until such time as regulations are issued by the Treasury Department, certain rules described in the legislative history of the

11

Tax Reform Act of 1986 will apply. Under those rules, market discount will be included in income either (a) on a constant interest basis or (b) in proportion to the accrual of stated interest.

An owner who acquires a Bond at a market discount also may be required to defer, until the maturity date of such Bond or the earlier disposition in a taxable transaction, the deduction of a portion of the amount of interest that the owner paid or accrued during the taxable year on indebtedness incurred or maintained to purchase or carry a Bond in excess of the aggregate amount of interest (including original issue discount) includable in such owner's gross income for the taxable year with respect to such Series 2015A Bond. The amount of such net interest expense deferred in a taxable year may not exceed the amount of market discount accrued on the Bond for the days during the taxable year on which the owner held the Bond and, in general, would be deductible when such market discount is includable in income. The amount of any remaining deferred deduction is to be taken into account in the taxable year in which the Bond matures or is disposed of in a taxable transaction. In the case of a disposition in which gain or loss is not recognized in whole or in part, any remaining deferred deduction will be allowed to the extent gain is recognized on the disposition. This deferral rule does not apply if the bondowner elects to include such market discount in income currently as described above.

Bond Premium. A purchaser who purchases a Bond at a cost greater than its then principal amount (or, in the case of a Bond issued with original issue premium, at a price in excess of its adjusted issue price) will have amortizable bond premium. If the holder elects to amortize the premium under Section 171 of the Code (which election will apply to all bonds held by the holder on the first day of the taxable year to which the election applies, and to all bonds thereafter acquired by the holder), such a purchaser must amortize the premium using constant yield principles based on the purchaser's yield to maturity. Amortizable bond premium is generally treated as an offset to interest income, and a reduction in basis is required for amortizable bond premium that is applied to reduce interest payments. Purchasers of any Bonds who acquire such Bonds at a premium (or with acquisition premium) should consult with their own tax advisors with respect to the determination and treatment of such premium for federal income tax purposes and with respect to state and local tax consequences of owning such Bonds.

Sale or Redemption of Bonds. A bondowner's tax basis for a Bond is the price such owner pays for the Bond plus the amount of any original issue discount and market discount previously included in income, reduced on account of any payments received (other than "qualified stated interest" payments) and any amortized bond premium. Gain or loss recognized on a sale, exchange or redemption of a Bond, measured by the difference between the amount realized and the basis of the Bond as so adjusted, will generally give rise to capital gain or loss if the Bond is held as a capital asset (except as discussed above under "—Market Discount"). The legal defeasance of Bonds may result in a deemed sale or exchange of such Bonds under certain circumstances; owners of such Bonds should consult their tax advisors as to the Federal income tax consequences of such an event.

Backup Withholding. A bondowner may, under certain circumstances, be subject to "backup withholding" (currently the rate of this withholding obligation is 28%, but the rate may change in the future) with respect to interest or original issue discount on the Bonds. This withholding generally applies if the owner of a Bond (a) fails to furnish the Registration Agent or other payor with its taxpayer identification number; (b) furnishes the Registration Agent or other payor an incorrect taxpayer identification number; (c) fails to report properly interest, dividends or other "reportable payments" as defined in the Code; or (d) under certain circumstances, fails to provide the Registration Agent or other payor with a certified statement, signed under penalty of perjury, that the taxpayer identification number provided is its correct number and that the holder is not subject to backup withholding. Backup withholding will not apply, however, with respect to certain payments made to bondowners, including payments to certain exempt recipients (such as certain exempt organizations) and to certain Nonresidents. Owners of the Bonds should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining the exemption.

Backup withholding is not an additional tax. Any amount paid as backup withholding would be credited against the bondholder's U.S. federal income tax liability, provided that the requisite information is timely provided to the Internal Revenue Service. The amount of "reportable payments" for each

12

calendar year and the amount of tax withheld, if any, with respect to payments on the Bonds will be reported to the bondowners and to the Internal Revenue Service.

Nonresident Borrowers. Under the Code, interest and original issue discount income with respect to Bonds held by nonresident alien individuals, foreign corporations or other non-United States persons ("Nonresidents") generally will not be subject to the United States withholding tax (or backup withholding) if the Metropolitan Government (or other Person who would otherwise be required to withhold tax from such payments) is provided with an appropriate statement that the beneficial owner of the Bond is a Nonresident. Notwithstanding the foregoing, if any such payments are effectively connected with a United States trade or business conducted by a Nonresident bondowner, they will be subject to regular United States income tax, but will ordinarily be exempt from United States withholding tax.

ERISA. The Employees Retirement Income Security Act of 1974, as amended ("ERISA"), and the Code generally prohibit certain transactions between a qualified employee benefit plan under ERISA or tax-qualified retirement plans and individual retirement accounts under the Code (collectively, the "Plans") and Persons who, with respect to a Plan, are fiduciaries or other "parties in interest" within the meaning of ERISA or "disqualified persons" within the meaning of the Code. All fiduciaries of Plans, in consultation with their advisors, should carefully consider the impact of ERISA and the Code on an investment in any Bond.

Future Legislative Changes. Proposed, pending or future tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the federal or state level, may adversely affect the tax-exempt status of the interest on the Bonds subsequent to their issuance. Future legislation could directly or indirectly reduce or eliminate the value of certain deductions and exclusions, including the benefit of the exclusion of tax-exempt interest on the Bonds from gross income for federal income tax purposes. Any such proposed legislation, actions or decisions, whether or not enacted, taken or rendered, could also adversely affect the value and liquidity of the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding the forgoing matters.

Miscellaneous. Tax legislation, administrative actions taken by tax authorities, and court decisions, whether at the Federal or state level, may adversely affect the tax-exempt status of interest on the Bonds under Federal or state law and could affect the market price or marketability of the Bonds.

Prospective bondholders should consult their own tax advisors regarding the foregoing matters.

RATINGS

Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., have assigned ratings of “Aa2” and “AA”, respectively, to the Bonds. The ratings reflect only the respective views of such organizations, and the Metropolitan Government makes no representation as to the appropriateness of the ratings. Any explanation of the significance of the ratings may be obtained only from the respective rating agency furnishing the same at the following addresses: Moody’s Investors Services, Inc., 7 World Trade Center at 250 Greenwich Street, New York, NY 10007; Standard & Poor’s Ratings Group, 55 Water Street, New York, New York 10041. The Metropolitan Government furnished to each rating agency certain information and materials, some of which may not have been included in this Official Statement, relating to the Metropolitan Government and its outstanding debt. Generally, rating agencies base their ratings upon such information and materials and upon investigations, studies and assumptions by the ratings agencies. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by any or all of such rating companies, if in the judgment of any or all companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or any of them, may have an adverse effect on the market price of the Bonds.

Additionally, due to the ongoing uncertainty regarding the debt of the United States of America,

including without limitation, the general economic conditions in the country, and other political and economic developments that may affect the financial condition of the United States government, the United States debt

13

limit, and the bond ratings of the United States and its instrumentalities, obligations issued by state and local governments, such as the Bonds, could be subject to a rating downgrade. Furthermore, if a significant default or other financial crisis should occur in the affairs of the United States or of any of it agencies or political subdivisions, then such event could also adversely affect the market for and ratings, liquidity, and market value of outstanding debt obligations, such as the Bonds.

UNDERWRITING

Morgan Stanley & Co. LLC, acting for and on behalf of itself and such other securities dealers as it may

designate, will purchase the Bonds for an aggregate purchase price of $400,510,210.49, which is par, plus original issue premium of $54,113,540.30, less Underwriter’s Discount of $838,329.81.

The Underwriter may offer and sell the Bonds to certain dealers (including dealer banks and dealers

depositing the Bonds into investment trusts) and others at prices different from the public offering prices stated on the inside cover page of this Official Statement. Such initial public offering prices may be changed from time to time by the Underwriter.

Morgan Stanley, parent company of Morgan Stanley & Co. LLC, Underwriter of the Bonds, has entered

into a retail distribution arrangement with Morgan Stanley Smith Barney LLC. As part of the distribution arrangement, Morgan Stanley & Co. LLC may distribute municipal securities to retail investors through the financial advisor network of Morgan Stanley Smith Barney LLC. As part of this arrangement, Morgan Stanley & Co. LLC may compensate Morgan Stanley Smith Barney LLC for its selling efforts with respect to the Bonds.

FINANCIAL ADVISOR

First Southwest Company, LLC is employed as Financial Advisor to the Metropolitan Government in

connection with the issuance of the Bonds. The Financial Advisor's fees for services rendered with respect to the sale of the Bonds are contingent upon the issuance and delivery of the Bonds. First Southwest Company, LLC, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. In the normal course of business, First Southwest Company, LLC may from time to time sell investment securities to the Metropolitan Government for the investment of bond proceeds or other funds of the Metropolitan Government upon the request of the Metropolitan Government.

The Financial Advisor has provided the following sentence for inclusion in this Official Statement: The

Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the Metropolitan Government and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information.

INDEPENDENT AUDITORS

An electronic link to the Metropolitan Government's comprehensive annual financial statements as of the fiscal year ended June 30, 2014 is included in Appendix A, and such financial statements have been audited by Crosslin & Associates, P.C., independent auditors, as stated in its report.

Crosslin & Associates, P.C. has not been engaged to perform and has not performed, since the date of

its report included herein, any procedure on the financial statements addressed in that report and has not performed any procedures relating to this Official Statement.

FORWARD-LOOKING STATEMENTS

The statements contained in this Official Statement, and in any other information provided by the

Metropolitan Government, that are not purely historical, are forward-looking statements, including certain

14

statements regarding the Metropolitan Government's expectations, hopes, intentions or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the Metropolitan Government on the date hereof and the Metropolitan Government assumes no obligation to update any such forward-looking statements. It is important to note that the Metropolitan Government's actual results could differ materially from those in such forward-looking statements.

The forward-looking statements herein are necessarily based on various assumptions and estimates and

are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Metropolitan Government. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement would prove to be accurate.

In considering the matters set forth in this Official Statement, prospective investors should carefully review all information included herein (particularly the information under the captions "INVESTMENT CONSIDERATIONS" and "FORWARD LOOKING STATEMENTS”) to identify any investment considerations. Potential investors should be thoroughly familiar with this entire Official Statement and the appendices hereto, and should have accessed whatever additional financial and other information any such investor may deem necessary, prior to making an investment decision with respect to the Bonds.

MISCELLANEOUS INFORMATION

There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents and resolutions in this Official Statement are made subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete statements of such provisions, and reference is made to such documents for further information. Reference is made to original documents in all respects. This Official Statement, and the execution and delivery of this Official Statement, were authorized by the Metropolitan Government.

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY /s/ Karl F. Dean Metropolitan Mayor

/s/ Richard M. Riebeling Director of Finance

APPENDIX A

ELECTRONIC LINK TO COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE METROPOLITAN GOVERNMENT

FOR THE FISCAL YEAR ENDED JUNE 30, 2014

[THIS PAGE INTENTIONALLY LEFT BLANK]

General Purpose Financial Statements

Audited Financial Statements of the Metropolitan Government and supplementary information as of and for the fiscal year ending June 30, 2014, together with the independent auditors' report from Crosslin & Associates, Certified Public Accountants, are available through the website of the Metropolitan Government's Department of Finance at http://www.nashville.gov/Finance/Office-of-the-Treasurer/Debt/Investor-Relations.aspx and are hereby incorporated by reference as part of this Appendix A. To the extent there are any differences between the electronically posted financial statements of the Metropolitan Government and the printed financial statements of the Metropolitan Government, the printed version shall control.

Crosslin & Associates, Certified Public Accountants has not been engaged to perform and has not performed, since the date of its report included herein, any procedure on the financial statements addressed in that report and has not performed any procedures relating to this Official Statement.

A-1

APPENDIX B

FINANCIAL AND DEMOGRAPHIC INFORMATION RELATED TO THE METROPOLITAN GOVERNMENT

B-1

FINANCIAL INFORMATION RELATED TO THE METROPOLITAN GOVERNMENT

The Metropolitan Government

Organization On June 28, 1962, the voters of Nashville and Davidson County approved the Charter of the Metropolitan Government (the “Charter”). The Tennessee Supreme Court upheld the validity of the Charter in October 1962. On April 1, 1963 the governments of the City of Nashville and of Davidson County were consolidated to form “The Metropolitan Government of Nashville and Davidson County” (the “Metropolitan Government”), under which the boundaries of Nashville and Davidson County are co-extensive.

The executive and administrative powers are vested in the Metropolitan Mayor (the “Mayor”), who is elected at large for a four-year term. The Mayor is authorized to administer, supervise and control all departments and to appoint all members of boards and commissions created by the Charter or by ordinance enacted pursuant to the Charter unless otherwise excepted. A two-thirds vote of the Metropolitan County Council is required to override the Mayor’s veto. The Charter also provides for a Vice Mayor, who is elected at large for a four-year term and is the presiding officer of the Metropolitan County Council. The Metropolitan County Council is the legislative body of the Metropolitan Government and is composed of 40 members who are elected for four-year terms: 35 are elected from council districts and five are elected at large.

The Charter provides a framework for the Metropolitan Government in Nashville to serve the needs of two service districts: (i) the General Services District (“GSD”) and (ii) the Urban Services District (“USD”). The GSD embraces the entire area of Davidson County and is taxed to support those services, functions and debt obligations, which are deemed properly chargeable to the whole population. Such services include general administration, police, fire protection, courts, jails, health, welfare, hospitals, streets and roads, traffic, schools, parks and recreation, auditoriums, public housing, urban renewal, planning and public libraries. The original USD conformed to the corporate limits of the City of Nashville as they existed on April 1, 1963, the date of consolidation. The residents of the USD are charged an additional tax to support those services, functions and debt obligations, which benefit only the USD. Such services include additional police and fire protection, storm sewers, street lighting and refuse collection. The Charter provides: “The area of the Urban Services District may be expanded and its territorial limits extended by annexation whenever particular areas of the General Services District come to need urban services, and the Metropolitan Government becomes able to provide such services within a reasonable period which shall be not greater than one year after ad valorem taxes in the annexed area become due.” Since April 1, 1963, the area of the USD has been expanded from 72 square miles to 184 square miles.

Fiscal Year

The Metropolitan Government operates on a fiscal year, which commences July 1 and ends June 30.

Budgeting Procedures

Operating Budget. The Charter requires the Director of Finance to obtain information necessary to compile the annual operating budget of the Metropolitan Government from all officers, departments, boards, commissions and other agencies for which appropriations are made by the Metropolitan Government or which collect revenues for the Metropolitan Government.

The Mayor reviews the operating budget submitted by the Director of Finance, and may make such revisions in the budget deemed necessary or desirable before it is submitted to the Metropolitan County Council for consideration no later than May 1st. In no event can the total appropriations from any fund exceed the total anticipated revenues plus the estimated unappropriated fund balance and applicable reserves. After the Metropolitan County Council has passed the budget ordinance on first reading, it will hold public hearings. After the conclusion of the public hearings, the Metropolitan County Council may amend the operating budget prepared by the Mayor. The budget as finally amended and adopted, however, must provide for all expenditures required by law or by provisions of the Charter and for all debt service requirements for the ensuing fiscal year as certified by the Director of Finance. If the Metropolitan County Council fails to adopt a budget by July 1st, the budget submitted by the Mayor is deemed to be the adopted budget.

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The Charter requires that following the adoption of the Metropolitan Government’s annual operating budget, an annual tax is to be levied on all taxable property within the GSD and an additional annual tax on all taxable property within the USD. These annual taxes must be at rates sufficient to finance the GSD and USD budgets adopted for their respective service districts.

Capital Improvements Budget. As provided by the Charter, the capital improvements budget and program for the Metropolitan Government is prepared annually to “include a program of proposed capital expenditures for the ensuing fiscal year and the five fiscal years thereafter....” The Mayor submits to the Metropolitan County Council the capital improvements budget, based on information from all officers, departments, boards, commissions and other agencies requesting funds from the Metropolitan Government for capital improvements, and recommends those projects to be undertaken during the ensuing fiscal year and the method of financing them. The Mayor’s recommendation notes the impact of proposed projects on the debt structure of the Metropolitan Government and includes in the appropriate current operating budget any projects to be financed from current revenues for the ensuing fiscal year.

The Metropolitan County Council has the power to accept, with or without amendment, or reject, the proposed program and proposed means of financing. The Metropolitan County Council cannot authorize an expenditure for the construction of any building, structure, work or improvement, unless the appropriation for such project is included in its capital improvements budget, except to meet a public emergency threatening the lives, health or property of the inhabitants, when passed by two-thirds vote of the membership of the Metropolitan County Council.

The following information identifies recommended capital projects in the 2015-2016 Capital Improvements Budget, which are given priority for funding by the Mayor and the Metropolitan County Council for fiscal year 2014-2015 and the following five fiscal years.


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FY2015-2016 to FY2020-2021 Capital Improvements Budget - Final - By Agency% of '15-'16 % of '16-'21

Departments FY2015-16 Total FY2016-17 FY2017-18 FY2018-19 FY2019-20 FY2020-21 Total Total

Arts Commission $4,150,000 0.214% $4,150,000 0.079%

District Energy System - USD 30,755,000 1.586% $1,017,500 $825,000 $495,000 $495,000 33,587,500 0.642%

Farmers Market 80,000 0.004% 80,000 0.002%

Finance 42,300,000 2.181% 5,000,000 2,000,000 2,000,000 51,300,000 0.980%

Fire Department - GSD 34,683,000 1.788% 26,183,000 60,866,000 1.163%

General Hospital 6,024,100 0.311% 5,285,000 11,309,100 0.216%

General Services 248,182,400 12.795% 802,900 802,900 802,900 802,900 251,394,000 4.802%

General Sessions Court 300,000 0.015% 300,000 0.006%

Health 1,100,000 0.057% 1,100,000 0.021%

Historical Commission 2,130,000 0.110% 3,619,000 5,749,000 0.110%

Human Resources 400,000 0.021% 400,000 0.008%

Information Technology Services 18,358,000 0.946% 18,358,000 0.351%

Juvenile Court 110,000 0.006% 110,000 0.002%

Juvenile Court Clerk 380,000 0.020% 380,000 0.007%

Mayor's Office 6,000,000 0.309% 6,000,000 0.115%

MDHA - GSD 155,800,000 8.032% 91,800,000 83,000,000 30,000,000 30,000,000 390,600,000 7.461%

Metro Action Commission 14,192,000 0.732% 14,192,000 0.271%

MNPS (Schools) 206,910,600 10.667% 294,958,700 211,532,400 181,875,100 120,251,800 $85,439,900 1,100,968,500 21.030%

MTA 48,571,000 2.504% 48,571,000 0.928%

Municipal Auditorium 2,637,000 0.136% 1,400,000 1,500,000 1,000,000 6,537,000 0.125%

Nashville Electric Service 35,000,000 1.804% 35,000,000 0.669%

Parks & Recreation 107,110,000 5.522% 107,110,000 2.046%

Planning - GSD 7,200,000 0.371% 6,700,000 6,700,000 6,700,000 27,300,000 0.521%

Planning - USD 250,000 0.013% 250,000 0.005%

Police 45,735,100 2.358% 45,735,100 0.874%

Public Library 25,625,600 1.321% 9,910,000 7,340,000 4,825,000 5,150,000 4,795,300 57,645,900 1.101%

Public Works - GSD 569,831,983 29.378% 222,960,000 216,760,000 192,160,000 158,552,000 161,060,000 1,521,323,983 29.059%

Public Works - USD 67,530,000 3.482% 23,000,000 7,000,000 1,600,000 1,600,000 1,600,000 102,330,000 1.955%

Sheriff 18,230,000 0.940% 18,230,000 0.348%

Social Services 772,500 0.040% 772,500 0.015%

Sports Authority 40,000,000 2.062% 40,000,000 0.764%

State Fair Board 100,000 0.005% 100,000 100,000 300,000 0.006%

State Trial Courts 1,000,000 0.052% 1,000,000 0.019%

Water & Sewer GSD 189,699,900 9.780% 196,889,600 317,773,200 209,324,600 324,444,500 1,238,131,800 23.650%

Water & Sewer USD 8,500,000 0.438% 8,500,000 5,750,000 5,750,000 5,750,000 34,250,000 0.654%

Totals $1,939,648,183 100.000% $898,125,700 $861,083,500 $636,532,600 $647,046,200 $252,895,200 $5,235,331,383 100.000%

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District Energy System of the Metropolitan Government

The Metropolitan Government’s District Energy System (“DES”) began operations in December 2003. DES is a district heating and cooling system that provides steam and chilled water to 41 buildings in the downtown Metropolitan Nashville area for the purposes of general heating and air conditioning. DES is managed by Constellation NewEnergy Projects (“CNE”) of Baltimore, MD. CNE has been involved in the development of many other district energy plants, including those in Chicago, Las Vegas, Old Hickory, TN, Pittsburgh and Baltimore. The Metropolitan Government is the owner of the DES and the site on which the facility is located.

The primary components of the DES include (i) the steam production subsystem consisting of four 65,000 PPH forced draft, dual-fuel boilers and associated appurtenances; (ii) the chilled water subsystem comprised of nine 2,600-ton electrical motor drive chillers, 18 single-cell, cross flow cooling towers and 6 chilled water and 5 condenser water pump/motor sets; (iii) a 69/13/8 KV supply substation and two 69/13.8 KV transformers; and (iv) 22,829 linear feet of chilled water supply, 22,829 linear feet of chilled water return piping, 22,086 linear feet of steam piping and 23,015 linear feet of condensate piping in the underground energy distribution system.

The Metropolitan Government is a customer of DES and purchased approximately 40.3% of the steam and 44.6% of the chilled water sold by the system for FY 15. In addition, the Metropolitan Government has covenanted to provide funding in an amount equal to any shortage in revenues necessary to pay debt service and operating expenses (the “Metro Funding Amount”) and to replenish the DES debt service reserve fund and operating reserve fund if necessary. To date, no amounts have been required to replenish the reserve funds and the amounts paid as the Metro Funding Amounts are as follows:

Fiscal Year Amount 2004 $2,000,000 2005 1,698,900 2006 2,173,100 2007 2,291,300 2008 1,214,050 2009 2,256,100 2010 2,444,100 2011 2,444,100 2012 2,363,000 2013 2,315,700 2014 1,958,300

2015 1,849,500 2016 1,794,000* *Budgeted Amount

The Sports Authority of the Metropolitan Government

The Sports Authority of The Metropolitan Government of Nashville and Davidson County (the “Authority”) is a public non-profit corporation and instrumentality of the Metropolitan Government organized in 1995 pursuant to Chapter 67, Title 7 of Tennessee Code Annotated, as amended; it is a Component Unit of the Metropolitan Government and is included in the Metropolitan Government’s CAFR. The purpose of the Authority is to plan, promote, finance, construct, and acquire sports complexes, stadiums, arenas, and facilities for public participation and enjoyment of professional and amateur sports activities for the people in the State of Tennessee. The Authority has no taxing power.

The Authority, on behalf of the Metropolitan Government, issued revenue bonds in 1996, 1998, 2012 and 2013 to assist in the funding of certain sports projects. The proceeds of the Series 1996 Bonds were used for a portion of the construction of the Coliseum (now LP Field) for the National Football League’s Tennessee Titans and Tennessee State University, the Series 1998 Bonds were issued to fund a portion of the franchise payment to the National Hockey League (“NHL”) for the NHL’s Nashville Predators, the Series 2012A Bonds were issued for upgrades to LP Field and the Series 2013A Bonds were issued to fund ice skating and hockey rinks in the southeastern part of Davidson County. These bond issues were primarily funded with new, dedicated revenue streams (consisting of a

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payment in lieu of tax from the Water and Sewerage Department, parking revenues, lease payments from Tennessee State University, a ticket surcharge at the Bridgestone Arena and a ticket surcharge at LP Field). However, a portion of the debt service as well as any deficiencies from the other pledged revenue streams for these prior bonds are backed by a pledge of the Metropolitan Government’s non-tax GSD General Fund revenues. In addition to the bond issues listed above, the Authority issued its Series 2013A and 2013B Ballpark Bonds in 2013 to fund a minor league baseball park. The Series 2013A and 2013B Ballpark Bonds are primarily funded by sales tax rebate revenues, tax increment financing payments, and team lease payments, and any deficiencies in revenue streams are backed by a pledge of the Metropolitan Government’s USD non-tax revenues. In 2004, a portion of the Authority’s Series 1996 Bonds were advance refunded for debt service savings, and in 2012, the Authority’s Series 1998 Bonds were refunded for debt service savings. In 2013, a portion of the Authority’s Series 2004 Bonds were refunded by the Authority’s Series 2013B Bonds for debt service savings, and in 2014 the remainder of the Series 2004 Bonds were refunded for debt service savings by the Authority’s Series 2014 Refunding Bonds. The annual debt service requirements for the Authority’s bond issues are approximately $13.5 million through 2019, $11.5 million through 2027, $7.1 million through 2034, and $4.3 million through 2044.

Metropolitan Development and Housing Agency

In December 2014, the Metropolitan Development and Housing Agency (“MDHA”) entered into a lease arrangement under which MDHA will construct and operate an approximately 1,000-space parking facility in downtown Nashville. The lease arrangements obligate MDHA to annual lease payments of approximately $2.9 million through 2044. The lease payments are payable primarily from parking revenues generated by the parking facility, which are projected by MDHA to be sufficient therefor, and in the event of a deficiency, from a subordinate pledge of non-tax USD General Fund Revenues.

Convention Center Authority of the Metropolitan Government

The Convention Center Authority (“CCA”) of the Metropolitan Government of Nashville and Davidson County is a nonprofit public corporation created in 2009 by the Metropolitan Government pursuant Chapter 89 of Title 7 of the Tennessee Code Annotated, as amended (the “Act”), for the purposes set forth in the Act, including, without limitation, owning, operating and financing a convention center in order to promote economic development and to stimulate business and commercial activity in the Metropolitan Government. The Metropolitan Council approved the creation of the CCA, its charter and the appointment by the Metropolitan Mayor of its Board members.

On April 21, 2010, the CCA issued $51,730,000 of its Tourism Tax Revenue Bonds, Series 2010A-1 and $152,395,000 Tourism Tax Revenue Bonds Federally Taxable, Series 2010A-2 (Build America Bonds-Direct Payment) (together, the “CCA Series 2010A Bonds”), and $419,090,000 Subordinate Tourism Tax Revenue Bonds Federally Taxable, Series 2010B (Build America Bonds-Direct Payment) (the “CCA Series 2010B Bonds”), to finance the development, construction, equipping, furnishing, repair, refurbishment and opening of a new downtown convention center facility (the “Convention Center” or “Music City Center”). For more information on the Convention Center and the Omni Hotel discussed below, see “Tourism” herein. The CCA Series 2010A Bonds are payable solely from certain hotel/motel tax revenues and certain other designated tourism tax revenues (the “Tourism Tax Revenues”). The CCA Series 2010B Bonds are payable from Tourism Tax Revenues, subordinate to the payment of the CCA Series 2010A Bonds, and from Convention Center operating income. If those funds are insufficient to pay debt service when due on the CCA Series 2010B Bonds, the Metropolitan Government has pledged its non-tax GSD General Fund revenues (as it has with respect to the Authority bonds described above) to the payment of debt service on the CCA Series 2010B Bonds. The maximum annual debt service on the CCA Series 2010B Bonds is approximately $27.1 million, net of reduced direct payment subsidies currently received from the federal government as a result of the CCA Series 2010B Bonds being issued as Build America Bonds, and is $26.5 million, net of the full amount of direct payment subsidies payable by the federal government. The CCA has established a debt service reserve equal to $26.5 million. Omni Hotels & Resorts (“Omni”) operates an 800-room hotel adjacent to the Convention Center that serves as the Center’s headquarters hotel. The hotel opened on October 1, 2013. The CCA has entered into a development agreement with Omni, under which the CCA has agreed to pay approximately $100 million in present value financial incentives for Omni to develop the hotel, which incentives are payable over the course of approximately 20 years from Omni’s completion of the hotel. The Metropolitan Government has pledged its non-tax GSD General

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Fund revenues (as it has with respect to the Authority bonds and the CCA Series 2010B Bonds described above) to the payment of these incentives, in the event the CCA is unable to make payment. The maximum annual incentive payment is approximately $15 million. The incentive payments are conditioned upon Omni’s construction and continued operation of the hotel.

Economic and Demographic Profile of the Metropolitan Government

Introduction

The Metropolitan Government as created in 1963, is in the north central part of Tennessee and covers 533 square miles. Nashville is the capital of the State of Tennessee and is situated in the Nashville Basin, between the Tennessee River on the west and the Eastern Highland Rim on the east.

Population Growth

The following table sets forth information concerning population growth in the Metropolitan Government. A comparison with the Nashville Metropolitan Statistical Area (“MSA”), the State and the United States serves to illustrate relative growth.

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY

DEMOGRAPHIC STATISTICS - POPULATION GROWTH

Change

Area 2000 2010 2000 - 2010 2014 Estimates

Nashville/Davidson 569,891 626,681 10.0% 668,347

MSA 1,311,789 1,670,900 27.4% 1,792,649

State 5,689,283 6,346,105 11.5% 6,549,352

United States 281,421,906 308,745,538 9.7% 318,857,056

Source - Census Bureau (census.gov)

Growth within the MSA has occurred to the greatest extent in surrounding communities, which, although suburbs of Nashville, are in themselves residential, manufacturing and agricultural communities.

Per Capita Personal Income

Area 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Davidson, TN 42,262 41,927 44,031 44,372 46,108 45,928 46,826 48,504 50,440 51,245 MSA 35,959 36,564 38,271 39,017 40,238 39,369 40,571 42,494 45,207 45,759 Tennessee 30,933 31,736 33,125 34,181 35,080 34,439 35,426 37,151 39,002 39,558 United States 34,300 35,888 38,127 39,804 40,873 39,379 40,144 42,332 44,200 44,765

Source - Bureau of Economic Analysis (bea.gov)

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Economy of the Metropolitan Area

Nashville has a diverse economy, having considerable involvement in commerce and industry, education and government. Agriculture is also a major factor in the economy of the surrounding counties. Insurance, finance, publishing, banking, health care, music, tourism, manufacturing and distribution are all mainstays of the economy. Lack of dependency on one industry has helped to insulate Nashville from the impact of product business cycles. Businesses have been attracted to Nashville because of its location, work force, services and taxes. The central location of Nashville, approximately halfway between Houston and New York, has contributed to its emergence as an important wholesale and retail center.


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Employment

The following table shows the labor force segments of the eight-county Nashville Metropolitan Statistical Area for calendar years 2004 through 2013.

NASHVILLE MSA

EMPLOYMENT BY INDUSTRY (1)

Industry 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Education & Health Services

105 108.2 112.1 116.1 118.9 122.7 126 129.5 132.6 135.8

Financial Activities 47.7 48.2 48.6 48.4 47.3 48.4 49.6 51 53.7 56.2

Government 102.6 104.3 105.8 109 110.5 111.9 111 109.8 110.7 111.3

Information 20.3 19.9 20.4 21.7 20.6 19.8 19.8 20.7 20.9 20.7

Leisure & Hospitality

77.1 80.2 83.5 82.4 79.4 79.7 81.6 86.4 90.5 95

Manufacturing 92.3 91.6 85.2 79.6 67.3 63.1 65.4 70.3 74.8 77.9

Professional & Business Services

98.9 101.2 104.1 102.9 95.1 100.4 108.5 117.7 125.5 134.4

Trade, Transportation, Utilities

156.1 159.2 160 160.4 153.1 153.1 157.7 163 167.8 172.9

Total Non-Agriculture Employment

768.6 785.1 794.7 793.5 756.3 762.5 786.1 816.4 846.1 876.4

Other 68.6 72.3 75 73 64.1 63.4 66.5 68 69.6 72.2

Source - Bureau of Labor Statics (bls.gov) (1) Employment numbers in thousands

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PERCENTAGE OF PERSONS EMPLOYED BY INDUSTRY: MSA, STATE, AND NATION

2014 2013 2012 2011 2010 2014 2013 2012 2011 2010 2014 2013 2012 2011 2010

Total Employed All Industries 1 876 846 816 786 763 2,815 2,759 2,714 2,661 2,615 139,042 136,393 134,104 131,842 130,275

In Percentages:

Education & Health Services 15.50% 15.67% 15.86% 16.03% 16.09% 14.31% 14.44% 14.42% 14.44% 14.30% 15.44% 15.47% 15.43% 15.34% 15.27%

Financial Activities 6.41% 6.35% 6.25% 6.31% 6.35% 5.02% 5.01% 5.07% 5.13% 5.24% 5.74% 5.78% 5.80% 5.84% 5.91%

Government 12.70% 12.98% 13.45% 14.12% 14.68% 15.09% 15.41% 15.61% 16.07% 16.55% 15.72% 16.02% 16.35% 16.75% 17.26%

Information 2.36% 2.47% 2.54% 2.52% 2.60% 1.56% 1.60% 1.58% 1.65% 1.72% 1.97% 1.98% 2.00% 2.03% 2.08%

Leisure & Hospitality 10.84% 10.70% 10.58% 10.38% 10.45% 10.52% 10.36% 10.21% 10.05% 10.02% 10.58% 10.45% 10.27% 10.13% 10.02%

Manufacturing 8.89% 8.84% 8.61% 8.32% 8.28% 11.55% 11.54% 11.55% 11.44% 11.43% 8.77% 8.81% 8.89% 8.89% 8.85%

Professional & Business Services 15.34% 14.83% 14.42% 13.80% 13.17% 13.23% 12.80% 12.40% 12.13% 11.63% 13.73% 13.57% 13.37% 13.15% 12.84%

Trade, Transportation, Utilities 19.73% 19.83% 19.97% 20.06% 20.08% 21.01% 21.10% 21.18% 21.17% 21.23% 18.98% 18.96% 19.00% 19.01% 18.91%

Other 8.24% 8.33% 8.33% 8.46% 8.31% 7.71% 7.74% 7.97% 7.92% 7.89% 9.07% 8.94% 8.89% 8.86% 8.87%

(1) Total Nonfarm Employment in thousands

Source - Bureau of Labor Stastics (bls.gov)

Nashville MSA Tennessee United States


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THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY PRINCIPAL EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO

June 30, 2014 June 30, 2005

Employer Employees Rank% of Total

Employment Employees Rank% of Total

Employment

Vanderbilt University and Medical Center 23,021 1 2.90 % 17,158 3 2.33 %

Metro Nashville-Davidson Co. Government and Public Schools 18,508 2 2.33 19,188 2 2.61

State of Tennessee 18,200 3 2.30 20,029 1 2.72

U.S. Government 12,177 4 1.54 11,146 4 1.51

Nissan North America Inc. 8,500 5 1.07 8,100 6 1.10

HCA (including Tri-Star Health System) (1) 7,000 6 0.88 9,657 5 1.31

St. Thomas Health Services 6,500 7 0.82 6,300 6 0.86

Randstad 3,400 8 0.43 - -

Shoney's Inc. 3,000 9 0.38 - -

The Kroger Company 2,863 10 0.36 2,649 10 0.36

Bridgestone America Holdings - - (2) 4,900 8 0.67 (2)

Gaylord Entertainment Co. (1) - - (2) 4,519 9 0.61 (2)

103,169 13.01 % 103,646 14.08 %

Sources:Principal Employers and Number of Employees - Nashville Area Chamber of Commerce, Nashville Business Journal

Total Employment - TN Department of Labor & Workforce Development

Note: The schedule reflects employers and number of employees within the Metropolitan Statistical Area

(1) National, State, or Corporate Headquarters.(2) Values for employers that are outside of the top ten ranking are excluded.


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Investment and Job Creation

In 2014, the Nashville Area Chamber of Commerce announced some 121 business relocations or expansions into the Nashville MSA, collectively bringing 19,525 new jobs and $2.5 billion in capital investment. Continued expansion has occurred in recent years in corporate and regional headquarters, information processing operations, the automotive industry, health care management and many areas where the local economy has established strength and growth potential.

Over the past several years, many sizable headquarters, shared service operations, and manufacturing operations have relocated and/ or expanded in Nashville. Bridgestone Americas announced that they will be moving their Corporate Headquarters to downtown Nashville creating 600 new jobs and the retention of 1,100 jobs. Warby Parker also announced they were opening their second corporate office in downtown Nashville creating 250 new jobs. Amazon announced the creation of 100 jobs near the Airport. Rural Media group announced the creation of 100 jobs and a move to Music Row in the core of Nashville. Another corporate headquarters, AIG, announced the creation of 200 new jobs and a move to Seven Springs located in Davidson County. Healthstream added 200 jobs in Nashville. Another Healthcare leader, National Healthcare Corporation, announced the addition of 200 jobs in Bellevue. The 2014 successes continue from last year when UBS established a shared services center in downtown Nashville, adding 1,000 new jobs in 2013. Asurion, which provides enhanced services to the wireless telecommunications industry, expanded its headquarter operations in 2013, adding 800 jobs to Nashville's employment base. Aramark, a global leader in delivering food, facility and uniform services for businesses, schools/universities, hospitals, and stadiums, relocated its new Business Services Center adding 1,500 new jobs. naviHealth, a Nashville-based startup in the health care industry, has expanded and added 175 new jobs. Total Quality Logistics, a truck brokerage service, added 105 new jobs to Davidson County. Inside Track, works with colleges and universities to improve student and institutional success, opened a Coaching Center in downtown Nashville adding 250 new jobs in 2013. AmSurg, who is a national leader in the development, management and operation of outpatient surgery centers, expanded its headquarter operations adding 50 new jobs to Nashville. Service Source expanded its downtown operations once again in 2013 adding 300 jobs in Nashville. Sony/ATV expanded adding 60 new jobs in 2013. TransCore, a global provider of toll and traffic management services, moved its corporate headquarters to downtown Nashville, adding 60 new jobs. Tyson Food Inc. expanded its meat-processing plant in Goodlettsville, adding 100 new jobs.

Unemployment Rates

The following table sets forth the unemployment percentage rates in Davidson County, the MSA, the State and the United States for the calendar years 2005-2014.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Davidson County 4.5 4.2 3.8 5.4 8.9 8.2 7.6 6.2 5.9 5.1 Nashville MSA 4.6 4.3 4.1 5.8 9.5 8.6 7.8 6.4 6.1 5.2 Tennessee 5.6 5.2 4.7 6.6 10.5 9.7 9.0 7.8 7.8 6.7 United States 5.1 4.6 4.6 5.8 9.3 9.6 8.9 8.1 7.4 6.2 Source: Bureau of Labor Statistics (bls.gov) as of April 21, 2015. Note: Each year, substate area data are subject to revision to incorporate updated inputs, reestimation and controlling to new statewide totals.

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Manufacturing

As of December 2014, an average of 77,900 persons were employed in the manufacturing industries in the MSA, engaging in a wide range of activities and producing a variety of products, including food, tobacco, textiles and furnishings, lumber and paper, printing and publishing, chemical and plastics, leather, concrete, glass, stone, primary metals, machinery and electronics, motor vehicle equipment, measuring and controlling devices, and consumer products.

Nashville MSA’s largest manufacturing employers include Nissan North America, Bridgestone Americas, Electrolux Home Products, A.O. Smith Water Products and Vought Aircraft Industries.

Trade Nashville is the major wholesale and retail trade center for the MSA and some 50 counties in the central region of the State, southern Kentucky and northern Alabama, a retail trade area of more than 2.3 million people with consumer spending by Nashville MSA residents exceeding $32.0 billion. Nashville is one of the top 50 retail markets in the country. In the Nashville region, there are 245 shopping centers with 37.3 million square feet of gross leasable area. Nine of these centers are super-regional and 15 are regional.

Agriculture

Nashville is surrounded by agricultural-based economies. The area encompassing middle Tennessee produces livestock, dairy products, soybeans, small grain, feed lot cattle, strawberries, hay and tobacco. Additionally, the area surrounding Nashville is the home of the Tennessee Walking Horse.

Transportation

Nashville serves as a conduit or trans-shipment point for much of the traffic between the northeast and southeast United States. Three interstate highways extending in six directions intersect in Nashville in addition to nine Federal highways and four State highways. Barge service on the Cumberland River, together with good rail and air services, give Nashville an excellent four-way transportation network.

The Cumberland River, connecting Nashville and the surrounding area to the Gulf of Mexico and intermediate points on the Ohio and Mississippi Rivers, is used by 51 commercial operators, 18 of which serve Nashville. With the completion of the Tennessee-Tombigbee Waterway in 1985, Cumberland River freight is able to reach the Port of Mobile, thereby eliminating approximately 600 miles of the distance from Nashville to the open sea and contributing to the development of foreign trade in Nashville. In addition, the Federal Government in 1982 approved Nashville as a Foreign Trade Zone, a secured area supervised by the United States Customs Service, which provides for the storing of foreign merchandise without duty payments.

The CSX System, a major national railroad, serves Nashville. In addition, five major rail lines link Nashville to all major markets in the nation. Rail carriers interchange freight and cooperate in providing and extending transit privileges covering both dry and cold storage and the processing or conversion of materials.

A commuter rail service from Lebanon, Tennessee to Nashville, approximately 32 miles, known as the Music City Star commenced transportation services in the September of 2006. It is operated under the direction of the Regional Transportation Authority, a multi-county agency. The ticket price includes Metropolitan Transportation Authority (“MTA”) bus service on circulator routes in the downtown area.

In 1973, the Metropolitan Government acquired the net assets of the Nashville Transit Company and the Metropolitan Transit Authority was established. MTA provides a comprehensive public transportation system covering the entire metropolitan area. In addition to regularly scheduled bus routes, MTA provides special transportation services for the handicapped and operates bus service in the downtown area for shoppers, tourists and downtown workers. The revenues derived from the transit system are not sufficient to pay the expenses incurred in the operation of the system. The Metropolitan Government and the State of Tennessee contributed in the fiscal year ending June 30, 2014, approximately $33.370 million and $4.585 million, respectively, to pay approximately 57.6% of the Authority’s operating expenses. The State directs revenues from a two cent per gallon gasoline tax, which it

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imposes on local governments that may be applied to mass transit. The contribution of the Metropolitan Government was paid from its general revenues.

The Metropolitan Nashville Airport Authority (the “Airport Authority”) owns Nashville International and John C. Tune airports. Nashville International Airport (the “Airport”) is situated approximately eight miles from downtown Nashville.

Airport Facts:

• 1 million+-square-foot terminal

• 44 gates and 15 commuter aircraft parking positions

• Up to 78 commuter aircraft parking positions on 4,500 acres

• Four runways

• Ranked eighth in the nation by Travel and Leisure for America’s Best Airports in 2013

• Served more than 11 million passengers in 2014…34th busiest airport in the U.S.

• 12 airlines

• $1.18 billion in wages and more than 39,700 jobs annually

• Serving 70 markets; 50 nonstop

• 380 daily flights

The Airport Authority also operates the John C. Tune Airport in the Cockrill Bend Industrial area west of Nashville. It serves the needs of regional corporate and private aircraft and allows Nashville International’s air carrier traffic to flow with fewer constraints. Tune Airport also provides a pilot training environment and modern facilities for the transient and corporate operator.

Construction

Construction in Nashville is illustrated by the table on the following page describing the number and value of building permits issued by the Department of Codes Administration of the Metropolitan Government.

Of the nine major areas of office development in Nashville, the Central Business District (“CBD”) is by far the largest, with approximately 12.4 million square feet of leasable space. The CBD achieved positive absorption of 94,000 square feet in 2014. Office vacancy in the CBD at the end of 2014 was 11.0% with another 442,000 square feet under construction. There continues to be strong interest in Downtown and in the new Music City Center, which has sparked new interest in office space downtown. Five other important office submarkets- Green Hills, West End, Airport North, Airport South and Rivergate - in Davidson County, meanwhile have vacancy rates at 10% or lower, reflecting the overall vitality of the city and improvement over 2013. Area-wide the city has the lowest vacancy in seven years. Leasing activity remains steady and growing in many Nashville office submarkets, which is a positive sign of economic recovery in Nashville. There is continued national interest in Nashville, and Tennessee’s attractiveness has been evident with new relocations, renewals and expansions.

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NUMBER AND VALUE OF BUILDING PERMITS IN THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY

(1) Includes moved residential buildings, house trailers, and the demolition of residential and non-residential buildings and signs & billboard permits Metropolitan Government Department of Code Administration

Repairs,

Residential Non-Residential Alterations and

Construction Construction Installations Other (1) Total

Calendar Number

of Number

of Number of Number

of Number

of Permit

Year Permits Value Permits Value Permits Value Permits Value Permits Value

2000 2,421 444,626,418 1,010 386,428,784 4,673 479,932,778 1,272 11,960,044 9,376 1,322,948,024

2001 2,975 521,311,880 896 354,527,042 4,146 336,595,779 1,179 14,962,413 9,196 1,227,397,114

2002 2,846 476,572,494 851 173,707,294 4,302 405,697,860 1,433 20,029,867 9,432 1,076,007,515

2003 3,207 536,278,115 693 279,867,295 4,531 356,979,647 1,222 20,013,372 9,653 1,193,138,429

2004 3,708 655,382,120 849 398,788,311 4,023 351,762,279 1,291 23,195,687 9,871 1,429,128,397

2005 3,794 747,525,151 865 428,627,829 4,431 462,950,966 1,434 24,073,860 10,524 1,663,177,806

2006 3,801 758,964,847 620 503,077,069 5,094 553,177,902 1,422 15,722,367 10,937 1,830,942,185

2007 5,965 851,544,710 1,453 619,951,806 2,754 267,721,486 1,469 17,293,882 11,641 1,756,511,884

2008 4,361 412,842,242 489 408,945,106 3,597 460,743,268 858 21,723,839 9,305 1,304,254,455

2009 3,149 318,357,857 495 375,074,904 1,913 205,828,855 1,730 14,464,364 7,287 913,725,980

2010 2,067 294,470,986 528 647,479,914 6,722 424,461,986 1,663 15,189,625 10,980 1,381,602,481

2011 2,166 372,440,931 444 382,483,854 3,163 377,053,306 1,840 18,738,180 7,613 1,150,716,271

2012 2,656 526,206,509 735 621,590,087 4,850 431,579,639 2,047 34,340,897 10,288 1,613,717,132

2013 3,406 737,396,336 762 493,330,146 3,405 455,745,450 2,135 23,344,644 9,708 1,709,816,576

2014 4,446 1,107,507,454 679 689,688,781 3,161 383,558,088 2,430 22,824,369 10,716 2,203,578,692

B-15

Medical and Cultural Facilities

Nashville is one of the nation’s leaders in the healthcare field. HCA Healthcare has its headquarters and operates several hospitals in the surrounding area. Baptist Hospital, Vanderbilt University Medical Center, and St. Thomas Hospital are the city’s other primary hospitals.

The Metropolitan Government relocated the city-owned hospital, the Metropolitan Nashville General Hospital, to Hubbard Hospital of Meharry Medical College in 1998. In addition, Meharry provides medical staff to the Metropolitan Nashville General Hospital. The arrangement provides the city with a renovated facility staffed with residents from Meharry Medical College.

The Nashville Public Library system includes a 300,000 square feet downtown main library and 20 community branches located across the county. In addition, an extensive online offering of books and resources has extended its reach beyond the traditional branch system. The library facilities host numerous in-house programs and community events throughout the year.

The Tennessee Performing Arts Center is the first state-funded facility of its kind in the nation and is home to the Nashville Ballet, the Nashville Opera Association, and the Tennessee Repertory Theatre. The arts center occupies an entire city block, and its venues include Andrew Jackson Hall (2,472 seats), the James Polk Theater (1,075 seats), the Andrew Jackson Theater (256 seats), and the War Memorial Auditorium (1,661 seats). The center plays host to numerous events each year, including an annual series of Broadway plays.

The Frist Center for the Visual Arts occupies the former Nashville’s historic downtown former post office building. A public-private partnership between the Metropolitan Government, the Frist Foundation and the Dr. Thomas F. Frist, Jr. family, the Frist Center contains more than 24,000 square feet of gallery space capable of showcasing major national and international visual arts exhibitions. The Frist Center does not house a permanent art collection but instead places special emphasis on education, arts-related programs for the school children of Nashville, and community outreach. The Center has given Nashville the ability to host significant art shows.

The Parthenon, located in Nashville’s Centennial Park, is a full-scale replica of the original building in Athens, Greece. The reproduction was built to honor Nashville’s reputation for education and has attracted visitors since 1897. The recently restored building features a 41’ tall gilded statue of Athena. Close ties have been established between Nashville and Athens, Greece to market and promote the two complimentary buildings.

The Nashville Children’s Theater is home to the oldest professional theater for children in the county. Thousands of school age children and adults are treated to a variety of productions each year. The 2013-2014 season will be the 82nd year for the theater.

Cheekwood Botanical Garden and Art Museum is a fifty-five acre site that includes the original Cheek gardens, with pools, fountains, statuary, extensive boxwood plantings and breathtaking views of the rolling Tennessee hills. The Museum of Art is housed in a 30,000-square foot Georgian-style mansion, and contains world-class collections of American and contemporary painting and sculpture, English and American decorative arts and traveling exhibitions. Collections also include silver, and the most comprehensive collection of Worcester porcelain in America.

Vanderbilt University’s Fine Arts Gallery showcases six exhibitions each year that represent Eastern and Western art and an international collection of works. The Van Vechten Gallery at Fisk University houses more than 100 pieces from artists like Picasso, Renoir, and O'Keeffe. For religious art, there’s a wooden 8-foot-by-17-foot carving of “The Last Supper” based on Leonardo da Vinci’s masterpiece at The Upper Room Chapel along with a striking 9,000-mosaic stained glass World Christian Fellowship Window. The museum at the Upper Room also has outstanding religious works, besides two annual displays of nearly 70 Ukrainian Easter eggs in April and more than 100 Nativity scenes in December.

B-16

Tourism

Tourism is a major industry in Nashville consistently ranking in the top 3 producers. The Convention and Visitors Corporation (CVC) and U. S. Travel Data Center estimate more than 13.1 million tourists came to Nashville in 2014 and spent approximately $4.9 billion. Music, history, art and generous hospitality attract convention delegates and leisure visitors. Recently the city has become known as a destination for great food and culinary creativity. Excellent air service combined with geographic location and a superior highway system contribute to the city’s success.

Nashville’s new Music City Center opened in May 2013 and features a 350,000 square foot exhibit hall, 75,000 square feet of ballroom space (consisting of a 57,000 square foot grand ballroom and an 18,000 square foot junior ballroom), 90,000 square feet of meeting rooms, 31 loading docks and a parking garage with 1,800 spaces. MCC management and the CVC exceeded their goal of over 1 million room nights booked prior to opening of the center. The Center has generated $243 million in direct economic impact in the first full year of operation.

A new $275 million full-service OMNI headquarters hotel opened in September 2013 next to the Music City Center. The 800-room OMNI Hotel features 4 restaurants, 2 ballrooms, 64,000 square feet of meeting space, pool and Spa fitness center. A feature unique to Nashville is the hotel’s physical connection to the adjacent Country Music Hall of Fame and Museum. OMNI, through an agreement with the Museum and the City, built an addition to the attraction almost doubling exhibit space and adding an 800 seat performance theater. The shared space provides access to the museum directly from the hotel and a 765 underground parking garage provides onsite parking.

The new Convention Center and OMNI hotel are located downtown in the Metropolitan Government's Central Business District, and are within walking distance of many notable attractions, including, the Bridgestone Arena, the Ryman Auditorium, Frist Center for the Visual Arts, Schermerhorn Symphony Center, Musicians Hall of Fame and Museum and the Johnny Cash Museum.

Each year for 43 years the Country Music Association has coordinated a music festival known as CMA Music Festival. The event includes performances by more than 100 entertainers and groups, autograph sessions and activities directed at the attendees. In 2001, the music festival moved to downtown Nashville and attendance has steadily increased, with 80,000 attendees in 2014. The last four years ABC has broadcast a 2 hour show of highlights with Nashville featured as much as the music.

In 2013, ABC TV network began broadcasting a weekly music/drama “Nashville.” The hour-long show is shot entirely in Nashville and features well known locales. Songs from top Nashville songwriters drive the storyline, enticing millions of viewers to watch an extended commercial for the city and then visit.

The downtown entertainment district features the Hard Rock Café, Jimmy Buffett’s Margaretville and the Wild Horse Saloon; a concert hall, restaurant, dance hall and TV production facility. The Ryman Auditorium (2,362 seats), former home of the Grand Ole Opry, is known for outstanding acoustics. The 123 year old Ryman has become a venue of choice by entertainers visiting Nashville and six times has been named Pollstar Magazines venue of the year for the United States. A four block section of the downtown area, called lower Broadway, features bars and clubs known as Honky Tonks. These venues are housed in historic brick buildings and highlight live bands performing 15 hours a day, 7 days a week and are in close proximity of the Bridgestone Arena (20,000 seats) and LP Field.

The Bridgestone Arena is now in its 19th year of operation as a premier entertainment facility and in 2011, 2012, 2013 and 2014 ranked 6th in the United States in concert attendance. The Arena is home of the Nashville Predators, a National Hockey League team that in 2012 played two rounds into the Stanley Cup playoffs, in its eighteenth season in Nashville.

Nashville is the headquarters of CMT (formerly Country Music Television). Their Nashville friendly programming is transmitted daily to 91 million households. Sirius XM Radio has their southern broadcast facilities inside the Bridgestone Arena where they program multiple channels in 8 studios with a potential daily audience of 49 million. RFD TV moved their production facilities to Nashville and are billed as Rural America’s most important network.

B-17

The Tennessee NFL Stadium, opened in 1999, with a recently announced name change to Nissan Stadium, is the home of the 1999 American Football Conference Champion and 2002 AFC South Division Champion Tennessee Titans and the 1999 Ohio Valley Conference Champion Tennessee State University Tigers. Now in its fourteenth year of operation, the Titans have sold out nearly all of the 69,000 seat Stadium for each of its games.

The Tennessee State Museum, the Cheekwood Botanical Gardens and Fine Arts Center, President Andrew Jackson’s Home: The Hermitage, Belmont Mansion, The Tennessee Performing Arts Center, the Adventure Science Center, and the Parthenon supplement educational and cultural opportunities in the City.

The Grand Ole Opry is America’s longest running live radio show. The Opry first broadcast in 1925 and the country music variety show now plays in a 4,372 seat theater in the Opryland complex near Opry Mills Mall and a few miles from downtown. Each show features 10 to 20 acts or performers and is broadcast on WSM terrestrial and internet radio drawing fans from around the world.

Opry Mills is a 1.1 million square foot megamall, which opened in May 2000. The mall contains 200 stores, theme restaurants, a 20 screen multi-theater complex and an IMAX theater. It is visited by more than 12 million customers annually.

The Adventure Science Center and the Nashville Zoo provide opportunities for adults and children to learn how science and wildlife affect their lives. The Center features a state-of-the-art Planetarium as well as exhibits and programs which focus on geology, zoology, ecology, physics and other sciences. The Nashville Zoo is continuing a multi-year, multi-million dollar expansion program which will make it one of the largest zoos in the country. The Zoo property is built around the historic 1810 Croft Home and features an ever-expanding display of animals from throughout the world.

The Nashville MSA has more than 326 hotels and motels offering more than 37,842 rooms. In addition to the 800 room OMNI Hotel, a 255 room Hyatt Place opened in fall of 2013 near the new Music City Center and a 194 room Hilton Garden Inn opened in the Vanderbilt area. Developers are in the construction or due diligence stage for 14 additional hotel properties in the downtown area. The Gaylord Opryland Resort and Convention Center is the third largest hotel/convention center under one roof in the United States. The complex features 2,881 hotel rooms, 263,000 square feet of exhibit space and 300,000 square feet of meeting space.


B-18

MSA HOTEL AND MOTEL ROOMS / OCCUPANCY RATE

Calendar Rooms Occupancy

Year Available Rate

1998 30,122 61.90% 1999 31,106 61.00% 2000 32,385 59.90% 2001 33,316 56.50% 2002 33,474 56.90% 2003 32,661 58.50% 2004 32,727 60.70% 2005 32,983 62.30% 2006 33,052 66.20% 2007 33,056 66.90% 2008 34,921 62.50% 2009 35,662 57.00% 2010 35,639 59.50% 2011 35,727 63.50% 2012 36,263 66.80% 2013 37,124 69.80% 2014 37,842 72.10%

Source: Nashville Conventions and Visitors Corporation


B-19

Education

The school system had its beginning in 1963 with the merger of Nashville and Davidson County. The Nashville public schools make up the second largest school system in Tennessee. In the 2014-2015 school year, Nashville had 157 public schools, with more than 84,500 students and 5,279 teachers. In addition, there are approximately 70 independent schools, which are attended by over 2,600 students from pre-kindergarten through 12th grade.

The Metropolitan Board of Education (“MBE”), consisting of 9 members, administers the school system. The Metropolitan Government voters elect one member from each school district to a four-year term. The terms are staggered so that at least four members are elected every two years. The MBE holds regular meetings on the second and fourth Tuesday of each month. These meetings are open to the public.

The current members of the MBE, the office held by each and the date their term of office expires are listed below.

Member Office Term Expires

Sharon Dixon Gentry, Ed.D. Chair 2016

Elissa Kim Vice-Chair 2016

Dr. Jo Ann Brannon Member 2018

Anna Shepherd Member 2018

Tyese Hunter Member 2018

Mary Pierce Member 2018

Jill Speering Member 2016

Will Pinkston Member 2016

Amy Frogge Member 2016


B-20

The following tables summarize certain information regarding the school system’s building facilities and enrollment and attendance trends.

Education Level Number of Schools School Year Enrollment

Pre-School ** 152

Pre-Kindergarten 3 2,176

Elementary 71 36,286

Middle 33 23,300

High 24 21,304

Alternative 4 ***

Exceptional Education 3 1,345

Charter Schools 19 ***

Total 157 84,563

**No Separate Facilities

***Included in grade totals

SCHOOL SYSTEM

Public Schools Enrollment and Attendance

School Year Enrollment Average

Attendance

2000-2001 69,457 65,289

2001-2002 69,700 66,319

2002-2003 70,028 66,554

2003-2004 70,760 65,857

2004-2005 71,651 65,960

2005-2006 72,735 67,530

2006-2007 74,163 69,360

2007-2008 74,733 70,231

2008-2009 75,043 69,686

2009-2010 76,329 70,979

2010-2011 78,096 73,808

2011-2012 79,117 75,072

2012-2013 81,077 76,946

2013-2014 82,863 78,471

SCHOOL SYSTEM

Public Education Facilities

2014-2015

B-21

The Nashville Metropolitan Statistical Area has 15 colleges and universities, including Vanderbilt University, Belmont University, Tennessee State University, David Lipscomb University, Meharry Medical College, Nashville State Technical Institute and Fisk University. Total higher education enrollment exceeds 65,000 students annually. Seven of Nashville’s institutions of higher education offer graduate programs. Nashville is also a leading center for medical research and education with Vanderbilt University emphasizing medical research in addition to its programs in other disciplines and with Meharry Medical College specializing in health care delivery.


B-22

Financial

Accounting

Pursuant to the Charter, independent auditors annually audit the financial statements of the Metropolitan Government. The Basic Financial Statements and other financial information, which are presented in the Comprehensive Annual Financial Report (CAFR), are prepared in accordance with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board and with those standards and procedures recommended by the State Comptroller of the Treasury. Copies of CAFRs are available on the Metropolitan Government’s website, http://www.nashville.gov/Finance/Office-of-the-Treasurer/Debt/Investor-Relations.aspx.

The Metropolitan Government reports the following major governmental funds:

The General Fund is the Metropolitan Government’s primary operating fund which is used to account for all financial resources of the general operations of the Metropolitan Government, except those required to be accounted for in another fund.

The General Purpose School Fund is used to account for the receipt and disbursement of federal, state and local funds for education purposes, except those required to be accounted for in another fund.

The GSD General Purposes Debt Service Fund is used to account for the accumulation of resources and the payment of principal and interest for the GSD general obligation debt. The GSD School Purposes Debt Service Fund is used to account for the accumulation of resources and the payment of principal and interest for the debt related to schools.

The USD General Purposes Debt Service Fund is used to account for the accumulation of resources and the payment of principal and interest for the USD general obligation debt. The GSD Capital Projects Fund is used to account for the use of bond proceeds for the construction and equipping of various public projects in the GSD.

The Education Capital Projects Fund is used to account for the use of bond proceeds for the construction and equipping of various school facilities. The USD Capital Projects Fund is used to account for the use of bond proceeds for the construction and equipping of various public projects in the USD.

The Metropolitan Government reports the following major enterprise funds:

The Department of Water and Sewerage Services provides services to customers on a self-supporting basis utilizing a rate structure designed to produce revenues sufficient to fund debt service requirements, operating expenses and adequate working capital. The District Energy System provides heating and cooling services to the Metropolitan Government and downtown businesses. The District Energy System is managed by a third party and is self-supporting by utilizing a rate structure designed to fund debt service requirements, pay for operating expenses and generate adequate working capital.

Additionally, the Metropolitan Government reports the following fund types:

Internal service funds are used to account for the operations of self-sustaining agencies rendering services to other agencies of the Metropolitan Government on a cost reimbursement basis. These services included fleet management, information systems, radio maintenance, insurance, postal services, treasury management, general services and printing.

Pension (and other employee benefit) trust funds are used to account for assets and liabilities held by the Metropolitan Government in a fiduciary capacity to provide retirement and disability benefits for employees and retirees.

Agency funds are used to account for assets held by elected officials as agents for individuals, collections by the Metropolitan Government due to the purchasers of certain outstanding property tax receivables, funds held by the Sheriff’s Department for inmates, and funds held by the Planning Commission for performance bonds for contractors.

B-23

Revenues The Metropolitan Government derives its revenues from a direct tax levy on real property, sales tax, fees, and State of Tennessee (the “State”) and Federal payments. During the fiscal year ended June 30, 2014, property taxes totaled $914.1 million dollars and accounted for 56.34% of all revenues available to the GSD General Fund and for GSD Debt Service; 91.05% of all revenues available to the USD General and Debt Service Funds; 40.04% of revenues available to the Schools funds, including Debt Service; and 0.59% of revenues available to the other governmental funds. Sales tax collections totaled $315.5 million in the fiscal year ended June 30, 2014. A description of each major revenue category available to both the GSD and USD follows:

Property Taxes – The levy is without legal limit. An amendment to the Charter states that certain increases in the ad valorem tax rate must be approved by referendum.

Sales Tax – A local option sales tax is collected at the rate of 2-1/4% on all sales of tangible personal property and certain services, except for sales of certain energy sources and other limited exemptions. This local option sales tax is currently levied, in accordance with State law, only on the first $1,600 of a transaction.

Other Taxes, Licenses, and Permits – This category includes charges for licenses and permits issued by departments, agencies, boards and commissions of the Metropolitan Government. Also included is the Hotel/Motel Tax, which is assessed against the gross receipts of hotels and motels within the Metropolitan Government, based on occupancy. Currently, there is a 6% tax levied by Metropolitan County Council ordinance. Half of the revenues derived from such tax are required to be allocated to the Convention Center Authority for payment of its bonds (see “– Convention Center Authority” in this Appendix B). 2% of the remaining 3% is required to be appropriated for tourist promotion, and the 1% balance is allocated to the general fund.

Fines, Forfeits and Penalties – This category includes collections of obligations imposed by the courts, law enforcement and agencies charged with the care of prisoners.

Revenue from Use of Money or Property – This category includes interest on investments, rentals and commissions for use of Metropolitan Government property or rights.

Revenue from Other Governmental Agencies and Contributions and Gifts – Under this revenue category are payments to the Metropolitan Government by other public divisions (Federal, State or other governmental units or agencies) and gifts or donations received from individuals or citizens groups.

Charges for Current Services – These are fees and charges for activities and services provided by agencies of the Metropolitan Government.

Revenues from Enterprise, Utility and Working Capital Funds – These are amounts received from the above types of funds as compensation for services rendered or as contributions.

Other Revenue – Includes (i) commissions and fees collected by certain officials for certain activities of the Metropolitan Government; (ii) proceeds from confiscation of property; (iii) compensation for loss, sale or damage to property; and (iv) miscellaneous.

B-24

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY GENERAL FUND (1)

FIVE YEAR SUMMARY OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

(1) Certain numbers have been re-classified for comparative purposes.

2014 2013 2012 2011 2010 REVENUES: Property taxes $491,647,887 $480,982,166 $443,340,151 $438,412,159 $444,069,326 Local option sales tax 102,395,435 97,752,470 91,050,593 81,191,512 79,665,435 Other taxes, licenses and permits 120,627,119 115,430,380 107,705,008 101,931,24 92,273,405 Fines, forfeits and penalties 12,780,838 12,866,976 12,573,870 13,245,652 14,945,708 Revenue from use of money of property 198,903 86,552 20,916 20,882 82,193 Revenue from other governmental agencies 87,412,640 83,258,475 77,327,122 78,494,810 76,934,508 Commissions and fees 14,790,053 15,590,951 15,355,507 15,177,986 13,991,938 Charges for current services 30,996,165 28,890,730 27,011,407 29,115,469 26,036,703 Compensation for loss, sale or damage to property 1,193,663 2,103,455 1,509,595 502,104 770,528 Contributions and gifts 359,992 391,814 432,325 533,958 598,824 Miscellaneous 1,567,356 1,568,111 1,697,115 1,770,865 2,148,142 Total Revenues 863,970,051 838,922,080 $778,023,609 $760,396,642 $751,516,710 EXPENDITURES General Government 25,903,721 26,138,400 $26,010,451 $24,920,818 $23,676,884 Fiscal administration 21,517,557 22,164,457 21,912,507 23,760,394 22,499,859 Administration of Justice 56,599,410 55,703,453 53,575,166 55,407,798 54,590,759 Law enforcement and care of prisoners 240,770,156 231,121,038 219,993,520 215,945,118 206,419,773 Fire prevention and control 109,211,951 110,753,856 108,609,078 109,108,267 104,214,957 Regulation and inspection 7,615,499 7,685,912 7,760,963 7,867,410 7,492,864 Conservation of natural resources 357,658 398,931 333,713 340,296 352,001 Public welfare 7,944,408 7,814,574 7,735,922 6,658,098 6,391,205 Public health and hospitals 62,670,990 65,669,538 60,411,628 62,481,289 93,805,990 Public library system 21,426,128 21,430,534 20,363,498 19,769,677 18,445,049 Public works, highway, and street 31,930,278 30,497,505 29,171,348 29,563,956 30,946,270 Recreational and cultural 34,535,016 33,609,697 32,214,593 31,849,947 31,368,718 Employee benefits 79,043,492 76,165,493 72,920,868 69,327,218 64,637,576 Miscellaneous 87,709,934 80,080,144 75,985,530 71,067,149 55,652,301 Total Expenditures 787,236,198 769,233,532 $736,998,785 $728,067,435 $720,494,206 Excess (Deficiency) of revenues over expenditures 76,733,853 69,688,548 41,024,824 32,329,207 31,022,504 Transfers in 20,174,668 36,857,090 40,553,865 41,898,124 17,158,395

Transfers out

(80,429,883) (76,751,375)

(78,320,831) (67,640,036)

(67,008,567)

Total Other Financing Sources (Uses)

(60,255,215) (39,894,285)

(37,766,966) (25,741,912)

(49,850,172) Excess (deficiency) of revenues and other sources over expenditures and other uses

16,478,638 29,794,263 3,257,858 6,587,295 (18,827,668)

FUND BALANCE, beginning of year

100,538,265 70,744,022

67,486,144 60,898,849

79,726,517 FUND BALANCE, end of year $117,016,903 $100,538,265 $70,744,002 $67,486,144 $60,898,849

B-25


SPECIAL REVENUE FUNDS (1) FIVE YEAR SUMMARY OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

Years Ended June 30

2014 2013 2012 2011 2010 REVENUES:

Property taxes

$286,542,463 $277,467,379

$225,243,162

$223,021,552

$226,114,328 Local option sales tax 186,859,425 201,896,100 188,282,638 175,271,993 171,369,784 Other taxes, licenses and permits 69,743,468 59,271,893 55,099,243 45,451,041 43,909,306 Fines, forfeits and penalties 4,910,031 5,479,124 3,256,519 4,834,363 3,414,841 Revenue from the use of money or property 870,054 64,148 22,113 96,206 225,106 Revenue from other governmental agencies 458,085,265 460,861,393 482,755,957 465,985,670 403,564,662 Commissions and fees (2) 9,330,306 8,620,598 8,646,969 8,282,460 8,010,122 Charges for current services 28,787,365 29,709,668 29,298,030 27,477,875 23,678,064 Compensation for loss, sale or damage to property 1,486,943 1,698,946 968,076 833,531 402,567 Contributions and gifts 6,424,294 6,163,884 4,716,714 2,998,162 4,094,898 Miscellaneous 633,575 513,816 572,582 697,845 558,235 Total revenues $1,053,673,189 $1,051,746,949 $998,862,003 $954,950,698 $885,341,913 EXPENDITURES General government 62,990,380 55,691,027 69,071,765 96,225,824 65,277,671 Fiscal administration 228,557 151,790 - - - Administration of justice 13,691,453 12,776,019 - - - Law enforcement and care of prisoners 23,004,447 28,263,321 35,283,366 33,779,726 32,594,686 Fire prevention and control 2,308,173 2,698,298 - - - Regulation and inspection 167,225 371,494 - - - Public welfare 30,417,582 32,241,772 31,433,222 34,727,797 36,555,083 Public health and hospitals 23,413,534 24,087,867 25,564,284 23,538,028 20,288,888 Public library system 923,424 898,004 814,644 772,565 571,944 Public works, highways and streets 29,887,199 27,753,624 22,621,447 28,587,767 20,092,811 Recreational and cultural 1,801,619 2,500,800 2,239,899 1,780,171 1,867,132 Education 856,359,742 832,358,297 797,821,823 777,006,808 740,545,641 Capital outlay 24,853,521 30,927,789 49,352,454 47,615,352 36,365,815 Total Expenditures 1,070,046,856 1,050,720,102 1,034,202,904 1,044,034,038 954,159,671 Excess (deficiency) of revenues over expenditures (16,373,667) 1,026,847 (35,340,901) (89,083,340) (68,817,758) OTHER FINANCING SOURCES (USES) Insurance recovery - - - 37,000,000 15,000,000 Transfers in 97,581,716 112,746, 251 113,965,491 93,818,289 67,848,554 Transfers out (75,528,001) (72,698,705) (60,474,881) (52,154,173) (65,664,990) Total Other Financing Sources (Uses) 22,053,715 40,047,546 53,490,610 78,664,116 17,183,564 Excess (deficiency) of revenues and other sources over expenditures and other uses 5,680,048 41,074,393 18,149,709 (10,419,224) (51,634,194) FUND BALANCE, beginning of year, as restated 159,804,286 118,729,893 100,580,184 110,999,408 162,633,602 FUND BALANCE, end of year $165,484,334 $159,804,286 $118,729,893 $100,580,184 $110,999,408

(1) Certain numbers have been re-classified for comparative purposes.

Source: The Metropolitan Government CAFR for each fiscal year

B-26

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY DEBT SERVICE FUNDS (1)

FIVE YEAR SUMMARY OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

Years Ended June 30 REVENUES:

2014

2013 2012 2011 2010

Property Taxes

$135,931,269

$133,949,349

$122,191,565

$120,804,490

$122,698,575

Local option sales tax

26,223,882

1,782,042 1,961,289 1,643,404 5,143,018

Fines, forfeits and penalties

534,916

306,638

422,692

494,577

554,813 Revenue from the use of money of

property

461,938

324,354

198,825 117,865

169,738 Revenue from other governmental

agencies

2,817,234

9,395,046

8,203,784

5,708,388

4,100,815

Compensation for loss, sale, or damage to property

650,000

- - - -

Charges for current services

-

- - -

972,094

Bond interest tax credit

4,837,386

4,900,351 5,033,674 5,327,305 -

Total Revenues

$171,456,625

$150,657,780

$138,011,829

$134,096,029

$133,639,053

EXPENDITURES

Principal retirement

97,320,344

44,743,407

12,943,203 3,397,777

85,889,567

Interest

101,497,666

93,272,037

93,879,521

85,123,862

80,611,709

Fiscal charges

3,226,035

3,716,622

3,257,031

3,406,148

906,832

Debt issue costs

-

2,704,649

2,207,494

1,925,066

4,347,663

Total Expenditures

$202,044,045

$144,436,715

$112,287,249

$93,852,853

$171,755,771

Excess (deficiency) of revenues over expenditures

(30,587,420)

6,221,065 25,724,580 40,243,176

(38,116,718)

OTHER FINANCING SOURCES (USES)

Issuance of refunding debt

-

382,598,457

316,085,913 290,201,755 189,895,243

Payments to refunded bond escrow agent

-

(433,836,850)

(383,595,322) (331,757,177) (206,868,923) Bond issue premium (discount)

-

53,750,807

67,444,362 43,480,488 18,244,966

Transfers in

17,655,902

16,407,137

15,724,752 13,996,949 18,831,042

Transfers out

(2,844,500)

(16,978,806) (51,793,700)

(44,160,500) -

Total Other Financing Sources (Uses)

14,811,402

1,940,745

(36,133,995) (28,238,485) 20,102,328 Excess (deficiency) of revenues and

other sources over expenditures and other uses

(15,776,018)

8,161,810

(10,409,415) 12,004,691 (18,014,390)

FUND BALANCE, beginning of year

37,330,128

29,168,318

39,577,733

27,573,042

45,587,432

FUND BALANCE, end of year

$21,554,110

$37,330,128

$29,168,318

$39,577,733 $27,573,042

(1) Includes the Correctional Facility Revenue Bonds.

B-27

Investment Policy

The Metropolitan County Council has approved a comprehensive Investment Policy governing the overall administration and investment management of those funds held in the Short-Term Investment Portfolio. The policy applies to all short-term financial assets of the Metropolitan Government from the time of receipt until the time the funds ultimately leave the Metropolitan Government accounts. These assets include, but are not limited to, all operating funds, bond funds, debt service reserve funds, water and sewer funds, Urban Services District and General Services District funds, those pension monies not yet allocated to money managers, all float and certain school funds.

The Short-Term Investment Portfolio of the Metropolitan Government is managed to accomplish the following hierarchy of objectives:

1) Preservation of principal

2) Maintenance of liquidity

3) Maximize returns

The Cash Investment Committee meets periodically to review the position of the portfolio and to discuss investment strategies. The Committee reviews investment policy and procedures at least once each year. The Metropolitan Treasurer is responsible for the investment process, carries out the daily operational requirements, and maintains written administrative procedures for the operation of the investment program that are consistent with the Investment Policy.

The Metropolitan Investment Pool has been established to meet investment objectives in the most cost-effective way. All payments and receipts of income on pool investments are allocated on a pro rata basis among the accounts invested in the pool on the daily invested balance in each fund. Earnings are calculated and distributed on a monthly basis.


B-28

Debt Calculations


COMPUTATION OF NET GENERAL OBLIGATION DEBT JUNE 30, 2014

Gross General Obligation Debt General Obligation Bonds Payable General Services District:

For School Purposes $

701,393,501

For General Purposes

1,274,006,703 Urban Services District:

For General Purposes

252,329,796 Total Gross General Obligation Debt $ 2,227,730,000 Less: Amounts Available In Debt Service Funds General Services District:

For School Purposes 6,392,039

For General Purposes 9,450,642

Urban Services District:

For General Purposes 5,711,429

Total Amounts Available In Debt Service Funds

21,554,110

Net General Obligation Debt $ 2,206,175,890

(1) Excludes general obligation debt funded by business-type activities. Source: The Metropolitan Government CAFR and Finance Department as of June 30, 2014

B-29

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY DEBT RATIOS AS OF JUNE 30, 2014 Total Debt Debt to Estimated Market Value 3.39% Debt to Assessed Value 11.02% Debt per Capita $ 3,382.51 Net Debt Debt to Estimated Market Value 3.35% Debt to Assessed Value 10.92% Debt per Capita $ 3,349.79 The above table is based upon: Estimated Market Value $ 65,810,054,890 Assessed Value $ 20,209,536,518 Population 658,602


B-30

The following table illustrates certain debt ratios for the past ten fiscal years.

HISTORICAL DEBT RATIOS

Percentage of Percentage of

Estimated Debt Service Ration of Ration of

Market Assessed Monies Net Debt to Net Debt to

Fiscal Valuation Valuation Gross Debt Available Net Debt Assessed Assessed Per

Year Population (in thousands) (in thousands) (in thousands) (in thousands) (in thousands) Valuation Valuation Capita

2004-05 580,455 $ 45,746,447 $ 13,432,024 $ 1,287,630 $ 136,955 $ 1,150,675 2.52 % 8.57

% $ 1,982.37

2005-06 576,382 50,477,219 15,533,719 1,608,390 83,596 1,524,794 3.02 9.82 2,645.46

2006-07 578,698 51,736,469 15,897,957 1,510,825 70,969 1,439,856 2.78 9.06 2,488.10

2007-08 619,626 60,386,015 16,152,729 1,725,785 56,803 1,668,982 2.76 10.33 2,693.53

2008-09 626,144 61,881,138 16,554,354 1,585,025 43,962 1,541,063 2.49 9.31 2,461.20

2009-10 635,710 63,157,227 19,222,371 1,910,500 25,950 1,884,550 2.98 9.80 2,964.48

2010-11 626,681 63,280,838 19,208,515 1,895,530 37,955 1,857,575 2.94 9.67 2,964.15

2011-12 635,475 63,127,519 19,104,264 1,923,680 29,168 1,894,512 3.00 9.92 2,981.25

2012-13 648,295 63,259,449 19,160,523 2,323,100 37,330 2,285,770 3.61 11.93 3,525.82

2013-14 658,602 65,810,055 20,209,537 2,227,730 21,554 2,206,176 3.35 10.92 3,349.79

Source: The Metropolitan Government CAFR as of June 30, 2014


B-31

The following table sets forth annual debt service requirements by district of the Metropolitan Government on outstanding general obligation bonds secured by ad valorem taxes.

TOTAL DEBT SERVICE


Total Debt Service as of June 30, 2014

Secured by Ad Valorem Taxes

Year GSD USD

Ending School General General Total GSD

June 30 Purposes Purposes Purposes and USD

2015 70,298,393 120,286,340 24,130,332 214,715,065

2016 71,109,512 118,684,634 20,580,139 210,374,285

2017 73,685,520 119,336,937 22,310,757 215,333,214

2018 72,820,453 115,815,804 23,868,546 212,504,803

2019 72,563,248 116,842,656 22,972,963 212,378,867

2020 64,262,296 119,928,830 20,807,848 204,998,974

2021 64,014,721 120,139,380 20,844,490 204,998,591

2022 63,276,107 117,279,506 20,441,215 200,996,828

2023 59,787,715 121,639,384 20,568,794 201,995,893

2024 65,320,889 118,042,868 21,632,115 204,995,872

2025 60,806,632 114,727,274 20,855,524 196,389,430

2026 50,629,087 99,687,987 18,696,587 169,013,661

2027 41,934,261 85,515,067 19,038,463 146,487,791

2028 35,363,171 82,467,166 17,927,283 135,757,620

2029 21,619,127 52,305,856 14,166,179 88,091,162

2030 21,465,350 52,003,257 14,072,521 87,541,128

2031 19,869,262 48,569,667 13,908,048 82,346,977

2032 19,704,753 48,246,865 13,803,138 81,754,756

2033 19,535,965 47,916,840 13,689,708 81,142,513

2034 9,895,500 19,371,903 9,493,971 38,761,374

2035 9,712,050 19,012,788 5,983,087 34,707,925

$ 987,674,012 $ 1,857,821,009 $ 379,791,708 $ 3,225,286,729 Source: The Metropolitan Government CAFR as of June 30, 2014

B-32

Principal Property Taxpayers

The following table presents information concerning the principal property taxpayers of the Metropolitan Government.

METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY PRINCIPAL PROPERTY TAXPAYERS

CURRENT YEAR AND NINE YEARS AGO

Unaudited- See Accompanying Accountants’ Report

December 31, 2013 December 31, 2004

% of % of 2013 Total 2004 Total Assessed Amount of Tax Assessed Amount of Tax

Taxpayer Valuation Tax Rank Levy Valuation Tax Rank Levy

Electric Power Board (1) $ N/A $ 25,427,819 1 2.90 % $ N/A $ 20,030,567 1 3.43 %

RHP Hotels Inc./Gaylord (3) 243,923,741 10,978,235 2 1.25 231,983,690 10,624,853 2 1.82

Columbia/HCA 261,865,701 10,575,070 3 1.20 125,217,930 5,826,627 4 1.00

Piedmont Natural Gas 95,451,319 4,195,603 4 0.48 88,634,534 3,829,263 6 0.66 Opry Mills Co. 91,202,000 4,118,691 5 0.47 71,260,110 3,263,713 7 0.56 The Mall at Green Hills 89,326,230 4,033,973 6 0.46 - - (2) - AT&T Telephone/Bellsouth(3) 75,220,120 3,396,940 7 0.39 170,336,493 7,500,238 3 1.29 100 Oaks Plaza 41,558,143 1,876,766 8 0.21 - - (2) - Vanderbilt 41,245,998 1,862,668 9 0.21 55,017,640 2,519,808 9 0.43 PREFCO XIV LTD 34,243,993 1,795,751 10 0.20 58,415,390 2,763,048 8 0.47 CBL & Associates - - (2) - 104,438,830 4,466,340 5 0.77 E.I. Dupont

- - (2) - 50,739,759 1,948,407 10 0.33

$ 974,037,245 $ 68,261,516 7.77 % $ 956,044,376 $ 62,772,864 10.76%

Source: Tax Assessor’s Office, Trustee Office

(1) The amount of tax for the Electric Power Board represents a payment in lieu of taxes and is not based on an assessed valuation. (2) Values for taxpayers that are outside the top ten ranking are excluded. (3) Certain properties have changed ownership between December 31, 2004 and December 31, 2013. For comparability purposes, the current and prior owners

are shown jointly.

B-33

Pension Plans and Other Post-Employment Benefits

Overview

Metro employees participate in one of three main pension plan groups:

1. Metro Active Plans 2. Tennessee Consolidated Retirement System (TCRS) for Metro Schools Certificated Employees

(Teachers) 3. Closed Plans maintained under the Guaranteed Payment Program

The Metro Active Plans consist of two divisions – A and B. Division A was established at the inception of the Government on April 1, 1963 and implemented on November 4, 1964. At that time, all employees of the former city and county governments were given the option of continuing as participants of the pension plans of those organizations or transferring to the Metro Plan Division A. Division A of the Metro Plan was closed to new members on July 1, 1995.

On July 1, 1995, Division B of the Metro Active Plans was established for all non-certified employees of the Metropolitan Nashville Public Schools and all other Metropolitan Government employees. Metropolitan Government employees who were members of Division A were given the option to transfer to Division B as of January 1, 1996. At that time, 95% of the approximately 11,300 employees elected to transfer to Division B.

The Metro Active Plan Division B is a non-contributory, defined benefit plan, covering approximately 13,000 current employees and 10,300 retired and deferred vested employees. The Active Plan covers all employees of the Metropolitan Government other than teachers. Contributions attributable to employees of the general government (approximately 75% of total) are funded from Metro’s operating fund and revenues. The balance of contributions (approximately 25%) is attributable to Metro employees at enterprise funds and other non-operating funded agencies of the Metropolitan Government (e.g. contributions for water and sewer department employees and funded from water and sewer revenues).

Metropolitan Nashville Public School’s (MNPS) teachers participate in the State Employees, Teachers, and Higher Education Employees’ Pension Plan (SETHEEPP), a cost-sharing multiple-employer, contributory, defined benefit plan administered by the Tennessee Consolidated Retirement System (TCRS). Approximately 6,630 current teachers and 2,350 retired teachers are covered by TCRS. TCRS issues a publicly available financial report that includes financial statements and required supplementary information for the SETHEEPP. That report may be obtained by writing to the Tennessee Treasury Department, Consolidated Retirement System, 10th Floor Andrew Jackson Building, Nashville, Tennessee 37243-0230 or can be accessed at www.tn.gov/treasury/tcrs.

The TCRS employer contribution rate is established at an actuarially determined rate and set every two years by the TCRS Board of Trustees. MNPS is required to make contributions based on the established rate directly to TCRS. The Metropolitan Government funds this contribution from its operating funds and revenues, through its annual funding of MNPS’s education budget. The employer rate for the fiscal year ending June 30, 2014 was 8.88% of annual covered payroll. The employer’s contributions to TCRS for the years ending June 30, 2014, and 2013, were $31,712,479 and $31,637,282 respectively, equal to the required contributions for each year. The Employer’s Contribution Rate for Fiscal Year 2013 and 2014 is 8.88%. Teachers are required by state statute to contribute 5% of salary to the plan.

The Closed Plans are defined benefit plans collectively covering one active employee and approximately 2,044 retired employees. Contributions to the Closed Plans are funded from Metro’s operating fund through the Guaranteed Payment Plan and contributions from the State of Tennessee.

B-34

Metro Active Plan

Benefits

Normal retirement for employees other than police officers and fire fighters occurs at the unreduced retirement age which is the earlier of (a) the date when the employee’s age plus the competed years of credited employee service equals 85, but not before age 60; and (b) the date when the employee reaches age 65 and completes 5 years of credited employee service. The lifetime annual benefit is calculated as 1.75% X final average earnings X years of credited service. Final average earnings are the highest 60 consecutive months of credited service divided by 5. Benefits fully vest on completing 5 years of service. Employees with a date of hire on or after January 1, 2013 will become fully vested on completing 10 years of service.

Normal retirement for police officers and fire fighters occurs any time after attaining the unreduced retirement age which is the date when the employee’s age plus completed years of credited police and fire service equals 75, but not before age 53 nor after age 60. The lifetime annual benefit is the sum of 2% of final average earnings X years of credited police and fire service up to 25 years; plus 1.75% of final average earnings X year of credited police and fire service over 25 years Final average earnings is the highest 60 consecutive months of credited service divided by 5. Benefits fully vest upon completing 5 years of service. Employees with a date of hire on or after January 1, 2013 will become fully vested on completing 10 years of service.

An early retirement pension is available for retired employees if the retirement occurs prior to the eligibility of normal retirement but after age 50 (45 for police and fire) and after the completion of 10 years credited employee service. Benefits are reduced by 4% for each of the first 5 years by which the retirement date precedes the normal retirement age, and by 8% for each additional year by which the retirement date precedes the normal retirement age.

Any employee who terminates after completion of required years of service to be vested and before eligibility for normal or early retirement is eligible to receive a monthly deferred pension commencing on the first day of the month following the attainment of unreduced retirement age computed and payable in accordance with the plan.

Funding

Minimum Required Employer Contribution: The Metropolitan Code of Ordinance requires the Metropolitan Government to contribute to the Metro Active Plans each fiscal year an amount equal to a percentage of the annual payroll of members who are eligible employees and who are covered for pension benefits the percentage to be known as the “employer contribution rate.” The employer contribution rate applicable for any fiscal year is determined by resolution of the benefit board at a public meeting held at least four months prior to the beginning date of such fiscal year and filed with the Metropolitan Clerk and must be no less than the smaller of (1) three-tenths of one percent plus the employer contribution rate applicable to the prior fiscal year, or (2) an employer contribution rate, which shall be the ratio of the actuarially determined contribution level to the amount of the valuation payroll, on the basis of an actuarial valuation of the system made as of the last day of the fiscal year preceding the adoption of the contribution rate. The actuarially determined contribution level equals the sum of normal cost and a percentage of unfunded past service liabilities, such percentage to be determined by the board at a level at least equal to the actuarial valuation interest rate. The actuarial valuation must be made by a qualified or accredited actuary according to accepted and sound actuarial principles and methods and based on actuarial assumptions which have been recommended by the actuary and approved by the Benefit Board.

Historic Employer Contribution: Metro has historically made employer contributions at a rate higher than the minimum required contribution. Metro’s policy has been to make annual contributions to the Active Plans equal to the actuary’s recommended rate, sufficient to amortize the unfunded liability over the 40 year period commencing in 1978. Beginning with the plan year ended June 30, 2006, the Benefit Board adopted a level unfunded liability amortization period of 15 years. The level amortization period is designed to reduce contribution volatility compared with a continuing decline in the amortization period. The chart below shows the annual employer contribution rate (in both percentage of employee salary and aggregate dollar terms) for the past 10 years. The employer contribution rate for fiscal year 2013-2014 is 17.117%. The Metropolitan Government expects that its contribution rate for 2014-2015 will increase to 17.987%. This increase results from the combination of (1) the anticipated changes in actuarial assumptions described below (which in isolation would reduce the contribution rate) and (2) the increase in unfunded liability described below.

B-35

Historical Metro Contributions Metro Active Plan

Key Actuarial Assumptions

• Current actuarial assumptions include a discount rate of 7.5%, cost-of-living adjustments (COLA) of 2.50% for Division A and 1.50% for Division B, salary increases averaging 4.0% annually and five year smoothing of gains and losses.


Fiscal Year Ending June 30

Contribution Rate Contribution Amount

2014 17.117% $87,643,045 2013 15.938% 82,653,128 2012 15.416% 81,636,995 2011 15.416% 81,502,645 2010 13.012% 72,253,372 2009 13.012% 72,561,790 2008 16.658% 90,922,719 2007 16.637% 85,427,968 2006 13.857% 68,674,155 2005 12.171% 58,894,435 2004 9.265% 44,902,059 2003 6.610% 30,123,759

B-36

Schedule of Funding Progress The table below provides a 10 year history of funding progress:

Metropolitan Government of Nashville and Davidson County Tennessee Pension Plan Schedule of Funding Progress

June 30, 2014

Unfunded Unfunded Actuarial Actuarial Accrued Liability

Plan Year Actuarial Value Actuarial Accrued as a % of Ending of Assets Accrued Liability Liability Funded Ratio Covered Payroll Covered Payroll

June 30, 1999 1,241,356,861 1,350,000,989 108,644,128 91.95% 375,552,645 28.93% June 30, 2000 1,419,820,507 1,522,468,982 102,648,475 93.30% 384,283,394 26.71% June 30, 2001 1,532,338,623 1,628,956,808 96,618,185 94.10% 398,426,904 24.25% June 30, 2002 1,569,455,257 1,668,629,134 99,173,877 94.10% 434,699,880 22.81% June 30, 2003 1,569,047,675 1,688,192,909 119,145,234 92.90% 466,820,160 25.52% June 30, 2004 1,592,671,213 1,708,318,774 115,647,561 93.20% 481,881,171 24.00% June 30, 2005 1,602,285,363 1,818,206,856 215,921,493 88.10% 474,531,741 45.50% June 30, 2006 1,706,677,125 1,959,952,204 253,275,079 87.10% 515,500,760 49.13% June 30, 2007 1,921,193,702 2,144,144,792 222,951,090 89.60% 529,100,484 42.14% June 30, 2008 2,119,228,659 2,323,837,472 204,608,813 91.20% 555,972,878 36.80% June 30, 2009 1,925,305,076 2,275,399,550 350,094,474 84.60% 562,015,408 62.29% June 30, 2010 2,143,522,150 2,360,892,310 217,370,160 90.80% 554,606,279 39.19% June 30, 2011 2,188,868,356 2,468,971,488 280,103,132 88.70% 571,381,362 49.02% June 30, 2012 2,185,046,912 2,580,685,072 395,638,160 84.70% 563,356,943 70.23% June 30, 2013 2,220,622,176 2,688,495,620 467,873,444 82.60% 556,220,289 84.12% June 30, 2014 2,450,131,517 2,730,430,660 280,299,143 89.73% 513,759,048 54.56%

B-37

The graph below provides a historical comparison of the plans funded ratio based on actuarial and market values of assets as a percentage of accrued liability.

Source: Bryan, Pendleton, Swats & McAllister, LLC Additional statistical information for the Active Plans can be found in the Metropolitan Government’s CAFR, a link to which is included in this Official Statement. TCRS Benefits TCRS provides retirement benefits as well as death and disability benefits. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service or at any age with 30 years of service. A reduced retirement benefit is available to vested members at the age of 55. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident or injury occurring while the member was in performance of duty. Members joining the system after July 1, 1979 become vested after five years of service and members joining prior to July 1, 1979 were vested after four years of service. Benefit provisions are established in state statue found in Title 8, Chapter 34-37 of the Tennessee Code Annotated (TCA). State statutes are amended by the Tennessee General Assembly.

B-38

Funding Sources Teachers – 5% of salaries Metro, via funding of the MNPS school budget, contributes an amount equal to the percentage of certified payroll set by the TCRS each year. The certified percentage results from a bi-annual TCRS actuarial report and equals normal cost, accrued liability cost and administrative costs (minus teacher contributions). Actuarial Information

Plan Year Ending

Actuarial Value of Assets

Actuarial Accrued Liability

Unfunded Actuarial Accrued Liability

Funded Ratio

Covered Payroll

Unfunded Actuarial Accrued

Liability as a percent of

Payroll 2013 $19,493,800 $20,300,591 $ 806,790 96.03% $3,747,221 21.53% 2011 18,388,337 19,423,152 1,034,815 94.67 3,626,582 28.53 2009 16,031,755 17,118,650 1,086,895 93.65 3,523,942 30.84 2007 15,993,095 15,998,286 5,191 99.97 3,241,772 0.16 2005 14,464,578 14,464,578 0 100.00 3,000,297 na 2003 13,509,863 13,509,863 0 100.00 2,762,152 na 2001 12,629,990 12,629,990 0 100.00 2,560,093 na

Source: TCRS Valuation and Report as of July 1, 2013 Annual Contributions Required TCRS contributions in 2013 and 2014 were 8.88% of salary, or $31,637,282 and $31,712,479. Required TCRS contributions in 2014 will be 8.88% of salary, or approximately $30,659,615. Trends It is anticipated that there will be upward pressure in the employer contribution rates in future actuarial valuations as the difference between the market value of assets and the actuarial value of assets that are being deferred are recognized. At June 30, 2011 $1.5 billion of market losses for the state-wide Teachers group are being deferred. Metro’s share of these losses will be recognized in future valuations. Additional Information Additional information about TCRS can be accessed at www.tn.gov/treasury/tcrs. Closed Plans – Guaranteed Payment Plan The Metro Council created the Guaranteed Payment Plan effective July 1, 2000 to ensure actuarially sound funding for a group of five closed plans supervised by the Metro Benefit Board and the Board of Education. Under the Guaranteed Payment Plan, unfunded liabilities of the aggregate plan are amortized over a period of no more than thirty years beginning with the effective date. Payments for each constituent plan are transferred to a payment account from which distributions are disbursed to the constituent plans as necessary to satisfy current benefit needs and funding objectives of the Guaranteed Payment Plan. Appropriations made by Metro and the Board of Education to fund obligations of the aggregate plan may not be reduced until all plan obligations are fully amortized. Plan improvements adopted subsequent to inception are to be funded over a period ending June 30, 2030.

B-39

The five plans included in the Guaranteed Payment Plan are: Metropolitan Board of Education Teacher Retirement Plan Davidson County Board of Education Retirement Plan Nashville City Teachers Retirement Plan Former Davidson County Pension System Former City of Nashville Pension System Current Funded Status

Metro’s Liability At June 30, 2013

(Dollars in Thousands)

(Dollars in Thousands)

Present Value of Future Benefits*

Present Value of Future Employee

Contributions

Actuarial Value of Assets

Remaining Liability

Metro Teachers $209,335 $0 $65,563 $143,772 County Teachers 32,507 0 0 32,507 City Teachers 15,576 0 0 15,576 City Employees 47,301 0 0 47,301 County Employees 10,053 0 0 10,053 Total

$314,772

$0

$65,563

$249,209

*Net of State cost-sharing in the three teacher plans

Based on current valuation, the expected amortization period is approximately 10.6 years. Historical Contributions

Contributions Metro Closed Plans

Additional statistical information for the Closed Plans can be found in the Metropolitan Government’s CAFR, a link to which is included in this Official Statement.

Fiscal Year Ending June 30

Metro Contributions State Contributions

2014 $33,512,358 $17,593,670 2013 33,521,052 18,130,962 2012 33,520,844 18,769,087 2011 33,529,553 19,333,186 2010 33,519,574 19,643,816 2009 33,513,758 20,106,215 2008 33,507,435 20,635,657 2007 33,486,214 21,017,217 2006 33,474,046 21,260,495 2005 33,519,098 21,699,309 2004 33,577,400 21,143,526 2003 33,577,329 20,983,034

B-40

The Metropolitan Government currently provides various other post-employment benefits (“OPEB”) other than pensions, with healthcare representing the most significant portion of the OPEB cost. For any retiree in the Metro, City or County Plan who elects to participate in the Metro Medical Benefit Plan, the Metropolitan Government contributes 75% of all premium payments, and the retiree contributes 25%. For employees hired January 1, 2013 or later, the Metropolitan Government contribution is based on years of service and ranges from 25% for a retiree with less than 15 years of service to 75% for a retiree with 20 or more years of service. January 1, 2014, Metro implemented a Medicare Part D or Employer Group Waiver Plan for eligible retirees that is expected to reduce OPEB liability. Funding is on a pay-as-you-go basis under which payments are made in amounts sufficient to cover benefits paid, administrative costs and anticipated inflationary increases. The Metropolitan Government also provides a matching contribution on dental insurance for any retiree who elects to participate and provides life insurance at no charge. During the year ended June 30, 2014, benefits paid totaled $49,598,824.

For any retiree in the Metro, City or County Education Plans who elects to participate in the medical and dental insurance plans of the Metropolitan Nashville Public Schools, Schools contribute 75% of all premium payments with the retiree contributing the remaining 25%. Funding is on a pay-as-you-go basis under which payments are made in amounts sufficient to cover benefits paid. During the year ended June 30, 2014, benefits paid totaled $19,693,001.

The Metropolitan Government adopted GASB Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions, in Fiscal Year 2008. This Statement addresses how governments should account for and report their costs and obligations related to post-employment healthcare and other non-pension benefits; it does not require that the liability be funded.

For June 30, 2014, amounts related to OPEB were (all amounts in thousands):

Metro Plan School Plan

Net OPEB Obligation $ 884,876 $ 170,029

Actuarial Accrued Liability (AAL) 2,032,364 424,865

Unfunded AAL 2,032,364 424,865

Annual Required Contribution 175,166 38,309

The key assumptions used in developing these amounts include:

• Current level of benefits provided

• July 1, 2014 valuation date and census data

• Actual dependent coverage information

• 4.5% rate of return (net of administrative expenses), 2.75% rate of inflation, and 4% of projected increases in salary

• Health care cost trend rate: 8% graded to 5% for other medical expenses, 11% graded to 5% for prescription drugs, 4% each year for dental and vision expenses

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Public Employees' Representation As of June 30, 2014, the Metropolitan Government and the Metropolitan Board of Education (the “MBE”) employed approximately 18,053 persons of whom approximately 10,103 worked full-time for the MBE and 7,950 worked full-time for the Metropolitan Government. Approximately 92% (1032) of the uniformed personnel of the Fire Department are members of Local No. 140 of the International Association of Firefighters. The Police Department has 1,947 active employees, of which 1,433 are sworn personnel. Approximately 1,112 sworn officers (or 78%) of the Police Department belong to the Fraternal Order of Police, Andrew Jackson Lodge No. 5, the designated employee representative. Of those employed by the MBE, approximately 1,798 (or 23%) of the teaching employees are members of the Metropolitan Nashville Education Association (the “MNEA”); 757 (or 18%) of the remaining non-teaching employees are members of the Service Employees International Union; and 154 (or 4%) are in the Steel Workers Union.

The MBE is a party to a Memorandum of Understanding with the MNEA which is renewed annually. The Metropolitan Government confers on an informal basis with representatives of employee unions mentioned above concerning employees' working conditions within their respective departments.

With the exception of school teachers covered specifically by the Education Professional Negotiation Act, which provides for memoranda of understanding, the State does not recognize collective bargaining agreements between municipalities and their employees. The State courts have ruled that collective bargaining between municipalities and their employees are void and of no effect because they are contrary to public policy. The State courts have also ruled that strikes by municipal employees are illegal and subject to injunction.

New Developments in State Law and Reporting

Under current Tennessee law and except as described below, the Metropolitan Government is generally not permitted to change the terms of a pension plan to reduce an accrued benefit, or the right to accrue future benefits, of any participant who is eligible to receive benefits under the plan (i.e., any vested participant) unless that participant consents to the decrease or reduction in benefits. However, a pension plan can be amended so as to exclude new employees. In addition, "The Public Employee Defined Benefit Financial Security Act of 2014" (the "2014 Act"), was signed into law by the Governor of Tennessee on May 22, 2014. The 2014 Act provides that for all affected employees of any political subdivision (such as the Metropolitan Government) hired on or after the effective date of the 2014 Act, the political subdivision may freeze, suspend or modify benefits, employee contributions and plan terms and design on a prospective basis (except as to those employees employed prior to the effective date of the 2014 Act where applicable law provides otherwise).

The 2014 Act also requires each political subdivision which provides its own defined benefit plan (such as Metro’s Active Plans and Closed Plans) to annually make a payment to its pension plan of no less than 100% of the actuarially-determined contribution that incorporates both the normal cost of benefits and amortization of the pension plan's unfunded accrued liability, if any. As described herein, the Metropolitan Government has historically funded at least 100% of the actuarially-determined contribution. The Metropolitan Government is prepared to comply with the 2014 Act and does not anticipate that compliance will materially affect the financial condition of the Metropolitan Government.

In 2012, the Governmental Accounting Standards Board (“GASB”) approved Statement No. 68, Accounting and Financial Reporting for Pensions, which will apply to the Active Plans and the TCRS Plans beginning with the Metropolitan Government’s 2015-2016 fiscal year. Among other things, Statement No. 68 will require the Metropolitan Government to identify the plan’s net pension liability (total plan liability minus the plan’s net position) as a liability on the Metropolitan Government’s statement of net position. For each fiscal year, Statement No. 68 will also require the Metropolitan Government to recognize certain changes in its net pension liability as a pension expense on its schedules of revenues, expenses and changes in net position. These accounting changes will not have any effect on the Metropolitan Government’s cash flows or fund financial statements, but will negatively impact the government wide statements of net position and activities, as described above.

APPENDIX C- FORM OF OPINION OF BOND COUNSEL

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(Form of Opinion of Bond Counsel)

Bass, Berry & Sims PLC 150 Third Avenue South, Suite 2800

Nashville, Tennessee 37201

July 30, 2015

We have acted as bond counsel to The Metropolitan Government of Nashville and Davidson County (the "Metropolitan Government") in connection with the issuance of $347,235,000 General Obligation Improvement Bonds, Series 2015C, dated July 30, 2015 (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deemed necessary to render this opinion.

As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify such facts by independent investigation.

Based on our examination, we are of the opinion, as of the date hereof, as follows:

1. The Bonds have been duly authorized, executed and issued in accordance with the constitution and laws of the State of Tennessee and constitute valid and binding general obligations of the Metropolitan Government.

2. The resolution of the Metropolitan County Council of the Metropolitan Government authorizing the Bonds has been duly and lawfully adopted, is in full force and effect and is a valid and binding agreement of the Metropolitan Government enforceable in accordance with its terms.

3. The Bonds constitute general obligations of the Metropolitan Government for the payment of which the Metropolitan Government has validly and irrevocably pledged its full faith and credit. The principal of and interest on the Bonds are payable from unlimited ad valorem taxes to be levied on all taxable property within the boundaries of the Metropolitan Government.

4. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, however, such interest is taken into account in determining adjusted current earnings of certain corporations for purposes of alternative minimum tax on corporations. The opinion set forth in the preceding sentence is subject to the condition that the Metropolitan Government comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause interest on the Bonds to be so included in gross income retroactive to the date of issuance of the Bonds. The Metropolitan Government has covenanted to comply with all such requirements. Except as set forth in this Paragraph 4, we express no opinion regarding other federal tax consequences arising with respect to the Bonds.

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5. Under existing law, the Bonds and the income therefrom are exempt from all present state, county and municipal taxes in Tennessee except (a) inheritance, transfer and estate taxes, (b) Tennessee excise taxes on all or a portion of the interest on any of the Bonds during the period such Bonds are held or beneficially owned by any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee, and (c) Tennessee franchise taxes by reason of the inclusion of the book of the Bonds in the Tennessee franchise tax base of any organization or entity, other than a sole proprietorship or general partnership doing business in the State of Tennessee.

It is to be understood that the rights of the owners of the Bonds and the enforceability of the Bonds and the resolution authorizing the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and that their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity.

We express no opinion herein as to the accuracy, adequacy or completeness of the Official Statement relating to the Bonds.

Yours truly,

Bass, Berry & Sims PLC

APPENDIX D

FORM OF CONTINUING DISCLOSURE CERTIFICATE

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THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY (TENNESSEE)


CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered this

30th day of July, 2015 by The Metropolitan Government of Nashville and Davidson County (Tennessee) (the "Metropolitan Government") in connection with the issuance of its $347,235,000 General Obligation Improvement Bonds, Series 2015C (the “Bonds”). The Bonds are being issued pursuant to the provisions of Tennessee law described herein and pursuant to the resolution of the Metropolitan County Council of the Metropolitan Government on June 9, 2015.

The Metropolitan Government covenants and agrees as follows:

SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Metropolitan Government for the benefit of the Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).

SECTION 2. Definitions. In addition to the definitions set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

"Annual Report" shall mean any Annual Report provided by the Metropolitan Government pursuant to the Rule and this Disclosure Certificate.

"Beneficial Owner" shall mean any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) is treated as the owner of any Bonds for federal income tax purposes.

"Dissemination Agent" means the Metropolitan Government or any successor designated in writing by the Metropolitan Government and which has filed with the Metropolitan Government a written acceptance of such designation.

"Fiscal Year" shall mean any period of twelve consecutive months adopted by the Metropolitan Government as its fiscal year for financial reporting purposes and shall initially mean the period beginning on July 1 of each calendar year and ending June 30 of the following calendar year.

"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.

"MSRB" shall mean the Municipal Securities Rulemaking Board, or any successor thereto.

"Official Statement" shall mean the Official Statement dated July 21, 2015, relating to the Bonds.

"Participating Underwriter" shall mean Morgan Stanley & Co. LLC.

"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

"State" shall mean the State of Tennessee.

"State Depository" shall mean any public or private depository or entity designated by the State as a state depository to which continuing disclosure information shall be sent pursuant to State law. As of the date of this Disclosure Certificate, there is no State Depository.

SECTION 3. Provision of Annual Reports. Not later than one year after the end of the Fiscal Year, commencing with Fiscal Year ending June 30, 2015, the Metropolitan Government shall provide an Annual Report

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to the MSRB at emma.msrb.org and to the State Depository, if any. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate. Notwithstanding the foregoing, the audited financial statements of the Metropolitan Government may be submitted separately from the balance of the Annual Report when such audited financial statements are available. In the event that the audited financial statements are not included with the Annual Report and will be submitted at a later date, the Metropolitan Government shall include unaudited financial statements of the Metropolitan Government in the Annual Report and shall indicate in the Annual Report the date on which the audited financial statements of the Metropolitan Government will be submitted. The audited financial statements of the Metropolitan Government, when available, will be provided to the MSRB and to the State Depository, if any. If the Annual Report (or audited financial statements which were to be separately submitted) is not timely filed, the Metropolitan Government shall in a timely manner send a notice to the MSRB and to the State Depository, if any. As of the date hereof, the Metropolitan Government is in compliance with the all required disclosure filings.

SECTION 4. Content of Annual Reports. The Metropolitan Government's Annual Report shall contain or incorporate by reference the following:

(a) If audited financial statements of the Metropolitan Government are not yet available, the unaudited financial statements of the Metropolitan Government, and when audited financial statements are available, the audited financial statements of the Metropolitan Government, both such types of financial statements to be prepared in conformity with generally accepted accounting principles, as in effect from time to time. Such financial statements shall be accompanied by an audit report resulting from an audit conducted by an independent certified public accountant or firm of independent certified public accountants in conformity with generally accepted auditing standards.

(b) If the accounting principles changed from the previous Fiscal Year, a description of the impact of the change as required by Section 8 of this Disclosure Certificate.

(c) A statement indicating that the Fiscal Year has not changed, or, if the Fiscal Year has changed, a statement indicating the new Fiscal Year.

(d) An update of the information in Appendix B to the Official Statement under the following headings:

1. "Capital Improvements Budget by Department";

2. "Revenues";

3. "Property Taxes";

4. "Summary of Major Funds";

5. "Computation of Net General Obligation Debt";

6. "Debt Ratios";

7. "Historical Debt Ratios";

8. "Total Debt Service"; and

9. "Pension Plans and other Post-Employment Benefits”

Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues with respect to which the Metropolitan Government is an "obligated person" (as defined by the Rule), which have been filed in accordance with the Rule and the other rules of the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB at emma.msrb.org. The Metropolitan Government shall clearly identify each such other document so incorporated by reference.

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SECTION 5. Reporting of Significant Events.

(a) This Section 5 shall govern the giving of notices of the occurrence of any of the following Listed Events:

a. Principal and interest payment delinquencies;

b. Non-payment related defaults, if material;

c. Unscheduled draws on debt service reserves reflecting financial difficulties;

d. Unscheduled draws on credit enhancements reflecting financial difficulties;

e. Substitution of credit or liquidity providers, or their failure to perform;

f. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;

g. Modifications to rights of Bondholders, if material;

h. Bond calls, if material, and tender offers;

i. Defeasances;

j. Release, substitution, or sale of property securing repayment of the securities, if material;

k. Rating changes;

l. Bankruptcy, insolvency, receivership or similar event of the obligated person;

m. The consummation of a merger, consolidation or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

n. Appointment of a successor or additional trustee or the change of name of a trustee, if material.

(b) Upon the occurrence of a Listed Event, the Metropolitan Government shall in a timely manner, but in no event more than ten (10) business days after the occurrence of such event, file a notice of such occurrence with the MSRB.

(c) For Listed Events where notice is only required upon a determination that such event would be material under applicable Federal securities laws, the Metropolitan Government shall determine the materiality of such event as soon as possible after learning of its occurrence.

SECTION 6. Termination of Reporting Obligation. The Metropolitan Government's obligations under this Disclosure Certificate shall terminate upon the defeasance (within the meaning of the Rule), prior redemption or payment in full of all of the Bonds. The Metropolitan Government shall notify the MSRB and any State Depository that the Metropolitan Government's obligations under this Disclosure Certificate have terminated. If the Metropolitan Government's obligations are assumed in full by some other entity, such person shall be responsible

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for compliance with this Disclosure Certificate in the same manner as if it were the Metropolitan Government, and the original Metropolitan Government shall have no further responsibility hereunder.

SECTION 7. Dissemination Agent. The Metropolitan Government may, from time to time, appoint a dissemination agent to assist it in carrying out its obligations under this Disclosure Certificate, and the Metropolitan Government may, from time to time, discharge the dissemination agent, with or without appointing a successor dissemination agent. If at any time there is not a designated dissemination agent, the Metropolitan Government shall be the dissemination agent.

SECTION 8. Amendment. This Disclosure Certificate may not be amended unless independent counsel experienced in securities law matters has rendered an opinion to the Metropolitan Government to the effect that the amendment does not violate the provisions of the Rule.

In the event that this Disclosure Certificate is amended or any provision of the Disclosure Certificate is waived, the notice of a Listed Event pursuant to Section 5(a)(vii) hereof shall explain, in narrative form, the reasons for the amendment or wavier and the impact of the change in the type of operating data or financial information being provided in the Annual Report. If an amendment or waiver is made in this Disclosure Certificate which allows for a change in the accounting principles to be used in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and impact of the change in the accounting principles on the presentation of the financial information. A notice of the change in the accounting principles shall be deemed to be material and shall be sent to the MSRB and any State Depository.

SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Metropolitan Government from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Metropolitan Government chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Certificate, the Metropolitan Government shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 10. Default. In the event of a failure of the Metropolitan Government to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any Beneficial Owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the Metropolitan Government to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of any party to comply with this Disclosure Certificate shall be an action to compel performance. The cost to the Metropolitan Government of performing its obligations under the provisions of this Disclosure Certificate shall be paid solely from funds lawfully available for such purpose.

SECTION 11. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Metropolitan Government, the Participating Underwriter and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 12. Intermediaries; Expenses. The Dissemination Agent is hereby authorized to employ intermediaries to carry out its obligations hereunder. The Dissemination Agent shall be reimbursed immediately for all such expenses and any other reasonable expense incurred hereunder (including, but not limited to, attorneys' fees).

SECTION 13. Governing Law. This Disclosure Certificate shall be governed by and construed in accordance with the laws of the State of Tennessee.

SECTION 14. Severability. In case any one or more of the provisions of this Disclosure Certificate shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Disclosure Certificate, but this Disclosure Certificate shall be construed and enforced as if such illegal or invalid provision had not been contained herein.

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SECTION 15. Filings with the MSRB. All filings required to be made with the MSRB shall be made electronically at emma.msrb.org, shall be accompanied by identifying information as prescribed by the MSRB and shall be submitted in any other manner pursuant to, and in accordance with, SEC Release No. 34-59062.


By: Karl F. Dean, Metropolitan Mayor

Attest: ________________________________

Shannon B. Hall, Metropolitan Clerk APPROVED AS TO FORM AND LEGALITY: ___________________________ Saul Solomon, Director of Law

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